Yuncan Hydroelectric Project

The 130MW Yuncan Hydroelectric project is now producing 901GWh of electrical power per year. The project covers areas in the Paucartambo and Huachón Districts (Pasco Province), around 350km north-east of Lima.

Total investment is estimated at $262m and the generators started operation in 2005, with the inauguration being held in November. The project was 75% financed by a loan from the JBIC (Japan Bank for International Cooperation) and 25% from local funds.

6GW generating capacity

In 2002, the US EIA DOE reported that Peru generated 21.7 billion kWh of electricity, while consuming 20.2 billion kWh. Most of Peru’s installed capacity links to the national grid SEIN (Sistema Eléctrico Interconectado Nacional), with the rest belonging to SAs (Sistemas Aislados) or self-producers.

Estimated electrical generation capacity in Peru is 6GW, half hydroelectric and half thermal (fuel oil-fired and diesel generation). Hydroelectric power output varies with rainfall, and Peru has been reducing dependence on hydropower somewhat, while increasing that on natural gas.

Vertical Pelton turbines

Yuncan is powered by the Paucartambo and Huachon Rivers. The catchment area is greater than 1,300km², and the reservoir’s total volume is 63,000m². The project involved the construction of two intake dams (one floating, one concrete-gravity), a 29km waterway and a 130MW underground Hydroelectric Center that uses three 44.5MW generators. Around 50km of 220kV transmission lines and associated substations between Yuncan and Carhuamayo were needed to connect to the national grid.

VA Tech Escher Wyss supplied the Vertical Pelton turbines, along with injector pipes and injector protection. The company supplies electromechanical equipment and services (‘Water to Wire’) for hydropower plants.

Local counterproposal for operating tender

Public opposition (including riots) has slowed the privatisation of Peruvian generating plants which began in the 1990s. In January 2003, ProInversión (Peru’s state privatisation agency) tried to privatise the Yuncan project, but the Provincial Government in Pasco produced a counter proposal and halted the privatisation. They pointed out that previous privatisations of state-owned entities, particularly mines, had brought little benefit to the region. A year later, ProInversión agreed with the Provincial Government that Enersur (a subsidiary of Tractebel) would operate the plant. The use contract was signed on 16 February 2004.

Enersur paid a total of $205m. This was composed of $57.6m contract right, as well as $124.5m use right to repay the JBIC and $23m for the Pasco Department Social Contribution (both over 17 years).

Contractors

J-POWER/EPDC was awarded the contract for the tendering and construction supervision of the project, funded by the OECF of Japan. J-POWER currently has a total hydro-generating capacity of 8,550MW.

Peruvian growth slows

Privatisation in Peru has been slowing since the 1990s. Gross domestic product (GDP) grew at 4.9% in 2002, slowing to around 4.0% in 2003 and 2004. Social problems like poverty, corruption, crime, political instability and unemployment have been responsible for the slowing.

Peru is one of five member countries of the Andean Community, a group that is moving towards a European Union-style single market. It also aims to integrate energy sectors, particularly for the electricity and natural gas markets. For example, Peru has been integrating its power grid with those of Colombia and Ecuador. Peru also joined APEC (Asia Pacific Economic Cooperation) forum in 1997. Construction projects and mineral exports are currently driving the economy.

The EIA DOE in the US reports that major environmental issues in Peru include deforestation, overgrazing and soil erosion, desertification, and water pollution from mining and municipal waste.