Peru to draw up energy transition roadmap

Peru's new interim president Francisco Sagasti is aiming to develop an energy transition roadmap before he leaves office in July 2021.

"We hope to leave the next government with a clear idea for the country to replace fossil fuels with different renewable forms of energy," Sagasti told correspondents in a wide-ranging press conference today.

His interim administration, which took over in mid-November following weeks of political turmoil, has started discussions on energy transition options within the context of Peru's broader climate change commitments.

The government is currently reviewing Peru's pledge to cut 30pc of greenhouse gas emissions by 2030, Sagasti said.

Current emissions are 170 MtCO2e, with 30pc coming from energy. Land use change, particularly deforestation for agriculture, is the largest contributor, at 45pc.

In September, the previous government unveiled a national registry of mitigation measures, known as Renami, billed as the first virtual platform in Latin America to monitor compliance with emissions reductions.

Environment minister Gabriel Quijandria told Argus that Renami is a "transparency tool" for emissions reporting. "Renami is necessary to manage information on greenhouse gas emissions to avoid overlap and help promote investment in mitigation," he said.

Hydrocarbons and mining play a significant role in Peru's economy. The country is South America's sole LNG exporter, anchored on natural gas reserves at the Camisea complex operated by Argentina's Pluspetrol. Peru is also a declining oil producer, with around 33,500 b/d of output in November. State-owned PetroPeru is carrying out a $5.4bn upgrade of its 65,000 b/d Talara refinery to 95,000 b/d by late 2021, with a planned reduction in the sulfur content of motor fuels.

Sagasti said the country needs ambitious but attainable climate goals. "In the short term, there will be investment in solar power, but investment will take much longer when we are talking about substitutes for gas and petroleum," he said.

The energy ministry estimates that Peru has the capacity to generate up to 60GW from hydropower, 20GW from solar plants and 10GW from wind farms.

In October, thermal plants mainly using gas accounted for 50pc generation in October, followed by hydro at 45pc, wind 4pc and solar 1pc, according to the energy ministry.

Peru's main revenue driver is copper. The country is the world's second largest producer behind neighboring Chile.

General elections are scheduled for April 2021. Sagasti is not eligible to run.

By Lucien Chauvin