Impact of renewables on the Peruvian electricity system

Peru is committed by international agreements such as the Paris Agreement and the UN 2030 Agenda for Sustainable Development to reduce its Green House Gas (GHG) emissions. Although Peru began promoting power plant projects based on renewable energies in 2008, the institutional impulse seems to have ceased today. Nonetheless, adopting renewable energy sources not only aids in fulfilling these commitments but also reduces electricity prices, fostering a more competitive economy. This study aims to provide a thorough analysis and evaluation of the impact that integrating Non-Conventional Renewable Energy Resources (NCRER) has on Peru's wholesale electricity market. Specifically, it focuses on the net total savings for the system, calculated as the difference between the reduction in energy costs traded and the cost of the renewable premium. To reach that goal a simplified yet analytical tool has been developed based on a multivariable regression of the real data of the market. The volume of natural gas not consumed and the volume of GHG emissions avoided will also be evaluated. The results show that based on the 2021 scenario, a NCRER share of 28.26 % would lead to a net saving for the final users of 316.04 MUSD in the annual energy traded in the market. The reduction of conventional thermal generation prevents the annual burning of 2.04 normal km3 of natural gas and the emission of 4.99 million tons of CO2-eq. To the authors' knowledge, this is the first time that the impact of NCRER production in the Peruvian electricity system has been quantitatively evaluated.