Peru Renewable Energy Market - Growth, Trends, and Forecasts (2020-2025)

The market for Renewable Energy Market in Peru is expected to grow at a CAGR of more than 5% in the forecast period of 2020-2025. Factors such as encouraging government policies and pressure to meet power demand using renewables to decrease dependency on fossils to decrease Carbon footprints are significant contributors to the growth of the market. Increasing global stress to achieve climate and renewable goals is pushing Peru to take initiatives to improve the renewable market. The declining costs of renewable technologies are becoming competitive with fossil fuel sources, and additional subsidies on renewables are driving the renewable market further. On the other hand, in the absence of any new initiatives and limited land and limited power capacity by variable renewable energy sources, there can be a fall in the growth of renewable.

• Wind installation in Peru has shown significant growth since 2014. With ambitious projects under construction, wind energy is going to drive the renewable market of Peru in the forecast period.
• Solar energy and Biomass collectively contributed more than 15% of renewable installation capacity in 2019. Solar energy has tremendous potential in Peru, which can be witnessed in the upcoming period.
• Although the government of Peru is exceptionally modest in terms of the renewable goal, with the aim of 5% by 2025, the government has launched several initiatives and schemes to encourage the growth of renewables commercially and residentially.

Key Market Trends

Wind Energy to Dominate the Market

• In 2018, Peru installed 372 MW of wind energy, which contributed 43% of the installed renewable capacity of renewable energy, considering hydropower in the account.
• The wind market companies have been able to install taller wind turbines due to improvements in the wind turbine materials used, which allows the turbines to exploit higher altitude winds. The growing size of the wind turbines has helped lower the cost of wind energy, indicating that it is economically competitive with fossil fuel alternatives.
• In July 2018, Enel Green Power Peru and Energy and mines Ministry of Peru inaugurated country’s largest wind farm “Wayra I” with a capacity of 132 MW with an investment of USD 165 million.
• With wind farms like Cupisnique with capacity 81 MW, San Juan de Marcona with a capacity of 24 MW, and Tres Hermanas with a capacity of 78 MW, Peru has nine active wind farms in 2019, that are continuously generating green energy.
• Owing to ambitious projects lined up to achieve the aim of a 5% share of renewables by the end of 2025, the growth of the wind market in Peru is inevitable.

Government Policies and Renewable Projects Expected to Drive the Market

• Enel Green Power in Peru installed the country’s largest solar farm, “Rubi,” with an installed capacity of more than 144 MW, generating 440 GWh of electricity for 350,000 Peruvian households. The farm is housing 560,800 PV solar panels.
• In 2018, Engie Energia successfully installed The Intipampa solar project with a capacity of 40 MW generated by 138,120 photovoltaic solar panels. The project was built with an investment of USD 52.3 million.
• According to General Directorate of Electricity (DGE) of the Ministry of Energy and Mines of Peru, three new renewable projects-Duna Wind Power Plant, Huambos Wind Power Plant, the Callao Biomass Power Plant, are set to be operational by the end of 2020, that will be adding significant capacity in the renewable sector of Peru.
• To increase the solar footprint in rural region of Andes and Amazon, the minister of energy and mines in June 2018 announced to install more than 260,000 solar panels countrywide.
• With upcoming projects in solar, wind, and Biomass and ongoing support by the government of Peru, the growth of renewable is inevitable in the forecast period.

Competitive Landscape

The Peru renewable energy market is partially fragmented. The major companies include Siemens Gamesa Renewable Energy SA, Acciona SA, Cobra Instalaciones y Servicios SA, Vestas Wind Systems A/S, and others.

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