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Peru Opportunities and Challenges of Small Hydropower Development. ESMAP Formal Report 340/11

Peru has had a long and successful experience in the utilization of hydropower. Hydropower supplied 68 percent of total electricity generated in the national interconnected system in 2008 as well as supplying dozens of small isolated communities with electricity. However, with the discovery and development of Camisea gas in the 1990s, hydropower development slowed.

Today, the Government is taking renewed interest in development of hydropower of all sizes, including small hydropower, which is seen to be a national resource that can be developed by local entrepreneurs, with minimal social and environmental impact.

The objective of this report is to contribute to the discussion on how to establish a framework for promotion of economically, socially and environmentally viable small hydropower development in Peru’s power sector. Among the key issues and challenges to be discussed in this document are the following:

• What is the small hydropower potential in Peru?

• Why hasn’t small hydropower development occurred on a larger scale in recent years in Peru, including economic, social and environmental considerations?

• How can Peru’s Renewable Energy Decree of 2008 be used to promote small hydropower?

• What additional measures are needed to overcome key barriers?

• What are the lessons learned in other countries that can they be applied to the case of Peru?

The Study looks at the challenge of hydropower development specifically in the Peruvian economic and energy context, as of mid 2008. However, the authors hope that the strategic issues examined and the report’s conclusions are also of value to other countries with significant hydropower potential and the desire to make optimal use of this important source of energy.

In parallel to this Study, the World Bank has prepared a report on medium sized hydropower titled Peru: Overcoming the Barriers to Hydropower. The World Bank is also conducting a study titled Peru, Assessment of Impacts of Climate Change on Mountain Hydrology: Development of a Methodology through a Case Study. We believe that the combination of these three studies will make a valuable contribution to the dialogue on sustainable hydropower development in Peru and elsewhere.

Related: Peru - El desarrollo hidroeléctrico en el Peru (Spanish)

Citation

Meier, Peter; Zolezzi, Eduardo H.; Bogach, Susan V.; Muir, Terence; Bazex, Karen. 2011. Peru Opportunities and Challenges of Small Hydropower Development. ESMAP Formal Report 340/11. Washington, DC: World Bank. http://documents.worldbank.org/curated/en/921231468143978970/Peru-opportunities-and-challenges-of-small-hydropower-development

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