Peru’s Central Bank warns of electricity rationing by 2012

[Judi Lynn]

Peru’s Central Bank warns of electricity rationing by 2012
under News June 22nd, 2011 by IFandP Newsroom

The Central Bank of Peru (BCR) has warned that the country’s key cities could be facing rolling black-outs or electricity rationing by mid-2012.

It attributes the issue mainly to a major delay in the expansion of the Camisea gas pipeline, required to improve the supply to power plants. The pipeline’s current capacity is 530mft3/d but it needs 920mft3/d.

The delay is understood to be caused by the rejection of the original environmental impact study as it passed through the National Sanctuary of Megantoni. Since then, Transportadora de Gas del Peru has amended the proposal, rerouting the pipeline outside the protected area, and the study is awaiting approval by the Ministry of Mining and Energy.

Gas plays a central part in Peru’s power generation as it enables 42% of electricity production. The bank predicts completion of the project by 2014 but until then the country is expected to see a reduced level of power generation. If combined power plants with a capacity greater than 350MW would fail simultaneously, the national grid would experience black-outs in 2Q2012, projects the BCR. This scenario would become particularly acute if demand grows along the predicted 9% while a severe drought would reduce hydro supply by 20%, leaving a potential 250MW shortfall in supply, says the bank.

http://www.ifandp.com/article/0011757.html



Ohhhhh, black-outs, rationing!

It's going to be Humala's fault, if you will believe what the fascists are going to claim. Just remember we heard about it BEFORE he was inaugurated!

[Bacchus39]

1. yes, if the power grids fail there will be black outs

It sounds like Peru is taking steps not only to address some of their energy needs but taking environmental considerations into account. I doubt blackouts would be good for the Humala administration politically.

[naaman fletcher]

2. I am hopeful that Humala will engage in proper planning.

Who are these fascists you talk about?

[joshcryer]

6. I don't know enough about it but in my mind a year is a long time to deal with something like this.

But if it's really entrenched then there may not be enough money to go around to take care of the problem without becoming serfs to the west (believe me the west can "fix" the problem that they're creating but at extreme costs to the taxpayer).

[Derechos]

3. The problems with the Camisea project are legendary

in Peru. The project is run by a consortium of extractive companies (including US Hunt Oil) and headed by Spanish oil giant Repsol. As with much of the extractive industries operations, this project was never well regulated or planned. From the start, the companies held control of the entire process from exploration, exploitation, to transport (which was poorly planned and has been plagued by accidents) and distribution, and have been allowed to set aside half of the fields' production for export at much lower prices than that those set for the Peruvian market even though Peru's own energy needs have not been met. The reality that Peruvians living right next door to the gas production were paying much higher prices than that destined for Brazil for example led to massive protests.

The proposed pipeline was poorly planned and has already reached capacity thus the push for the construction of a new one in very socially and environmentally sensitive areas. DAR Derechos Abientales y Recursos Naturales), an environmental organization has a good report on the project which states in part the following:

"La falta de planificación es otro elemento a resaltar: El ducto estuvo al máximo
de su capacidad en cuatro años cuando lo debió hacer en 20 años. La falta de
previsiones podría significar una nueva amenaza y un segundo ingreso a zonas de
alta sensibilidad social y ambiental con la finalidad de construir otro ducto para
satisfacer la demanda de gas natural. Es muy probable que no fuese necesario un
nuevo ducto si tanto el Estado como la banca multilateral (BID, Banco Mundial)
no hubiesen financiado el ducto de Perú LNG para la exportación, y, por el contrario,
hubiesen decidió financiar un mismo ducto para abastecer a la macro región
sur. Esta podría ser una mala consecuencia de haberse priorizado la exportación
del gas natural, en vez del abastecimiento de la demanda interna."

You can read the report here http://www.dar.org.pe/hidrocarburos/libro_tgp.pdf

This is also a pretty good article that sumarizes the project and concerns in English Natural Gas Exports are Challenged as Fair Deal for Peru - http://www.thecuttingedgenews.com/index.php?article=21614&pageid=&pagename=

During the campaign, Humala stated that he would push to renegotiate the terms of the contracts with the Camisea companies. One thing to look at if he tries is the role of international arbitration that has been used most effectively to prevent Peru from altering prior contracts made under previous governments. Even Garcia tried this with Antemina's tax stability provision and lost http://ipsnews.net/news.asp?idnews=50184. Other issues will concern the proposed pipeline's impact on environmental and indigenous rights. During the Garcia administration, Humala's party were strong supporters of indigneous collective property rights. It will be interesting to see what happens now that he is in power.

[Judi Lynn]

4. Thanks for adding vital information. This is a huge challange, isn't it?

Sure hope he can bring the change which is needed.

So much depends upon getting a GOOD President, finally.

It's so helpful to have seen what you've added.

[joshcryer]

5. "It's going to be Humala's fault", "Sure hope he can bring the change which is needed."

The first comment was tongue in cheek. This comment appears serious. So which is it?

I think if Humala's administration cannot fix the problem when he has foreshadowing of it and knows what to do to fix it, then he does get part of the blame, though the multi-nationals should be also criticized, if Humala knows they're the problem, he should remove them from the equation. If he doesn't then yeah, he gets part of the blame.