By Alex Pashley
LIMA, Peru
Peru will bet on natural gas and hydroelectric power, as it strives to reduce reliance on imported fossil fuels, the Energy and Mines Ministry said on Tuesday.
The ministry is developing a new strategy, to be worth $50 billion over ten years, in which the Andean country will also look to other renewable sources as it works to change its energy supply mix, Minister Eleodoro Mayorga said at the launch of the 2014-2025 National Energy Plan in Lima.
Peru will boost natural gas exploration and build a national pipeline network, while doubling hydroelectric capacity by 2021.
Raising energy production would provide demand for new mining projects and stimulate the country's $200 billion economy, Mayorga said.
Hydroelectric dams, and gas and oil power plants make up each about half of the country’s energy mix, according to ministry figures.
The rich Camisea gas fields in the Peruvian jungle have provided 46 percent of electricity production in the last ten years.
The contract to build a landmark $3.6 billion natural gas pipeline, connecting Camisea to power plants on the Pacific coast and supplying the petrochemical industry, was awarded in June.
“Natural gas will continue to be the most used resource at the level of final consumption and in the transformation of the petrochemical sector, demanding impetus in the exploration and development of hydrocarbons, the construction of a national pipeline network and the modernization of refineries,” Mayorga said.
Peru could become a regional energy suppler in the future, exporting surpluses when it completes the major pipeline, said President Ollanta Humala in September.
Electricity production had been sufficient to support Peru’s high rates of growth in the last decade, in which growth averaged over 6 percent between 2004 and 2013, said Mayorga.
The plan made a commitment to other types of renewable energy, currently minor contributors to power production.
Solar energy in the south and wind power in the north have been proposed as future drivers.
“The potential value of traditional and non-traditional renewables will be enhanced as part of our policy for climate change,” said the minister.
Envoys from 190 nations will gather in Lima next month for the United Nations climate change talks.
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