Renewable Energy and Energy Efficiency Trade Policy Mission to Peru

Lima, Peru

November 12-13, 2014

The U.S. Department of Commerce’s International Trade Administration (ITA) is organizing a Renewable Energy and Energy Efficiency (RE&EE) Trade Policy Mission to Lima, Peru from November 12-13, 2014. The mission is designed to be led by a senior Department of Commerce official, and will focus on: 1) creating a policy environment conducive to growth in Peru’s RE&EE market; 2) introducing U.S. RE&EE exporters to key Peruvian Government officials; and 3) supporting the United Nations Framework Convention on Climate Change annual meeting (COP-20) hosted by Peru in December 2014.

The RE&EE trade policy mission will promote the export competitiveness of U.S. wind, solar, geothermal, biomass, hydropower, waste-to-energy, smart grid, and energy efficiency industries; and will demonstrate U.S. Government support for Peru’s strong renewable energy and energy efficiency goals. The mission supports ITA’s commitment in the Renewable Energy and Energy Efficiency Export Initiative (RE4I) to significantly increase U.S. RE&EE exports through the development and creation of new export opportunities.

REGISTER HERE

COMMERCIAL SETTING

For the past decade, Peru has led South America as the country with the highest average annual growth in GDP (6.4%) and lowest inflation (2.9%). In fact, Peru’s credit rating was increased by Fitch Ratings to BBB+, making it the highest-ranked South American country after Chile. Much of the country’s growth has been a result of an expansion in energy-intensive mining, which has caused Peru’s energy demand to increase substantially. As a result, Peru has the fourth highest energy demand of any Latin American country, a challenge that is focusing new investment – both international and domestic – on the development of stable, domestically-produced, renewable energy resources.

To promote renewable energy development, Peru now offers several policy incentives, including priority dispatch for renewable electricity, accelerated depreciation of up to 20 percent for investments in machinery or equipment that support renewable energy deployment, and technology-specific auctions. The country also features a 5 percent clean energy generation target and a biofuel blending mandate of 7.8 percent. Peru’s Ministry of Energy and Mines (MEM) is currently considering a new target, as it is charged with updating the national renewable energy target every five years.

To date, the technology-specific auctions have been the key driver of renewable energy deployment in Peru, promoting the development of several wind, solar, small hydro and biomass projects across the country. Introduced in 2008, the auctions are conducted by the MEM and award contracts to developers that offer the lowest tariff per kilowatt (kWh) for a given technology. Prices are guaranteed for 20 years, providing a stable investment climate – the result of which has been considerable international investor interest in the market. In fact, Peru has held four renewable auctions, including one for off-grid solar capacity. In the on-grid tenders, OSINERGMIN has awarded power contracts to 58 projects for a total of 882MW from biomass, small hydro, solar and wind sources. According to its regulations, the Peruvian Government evaluates the need for additional auctions every two years.

Peru’s liberalized power market and strong policy regime led to over $1 billion of cumulative clean energy investment in 2012, with additional investment expected well into the future. Today, Peru generates 52 percent of its electricity from renewable sources – mostly from large hydro (43 percent), biomass and waste, solar and small hydro. Natural gas, oil and diesel account for the rest, with several large mining operations producing their own power using expensive diesel generators.

ITA expects export opportunities for U.S. companies in all six RE&EE subsectors, including wind, solar, geothermal, biomass, hydropower, and renewable fuels; as well as in the smart grid and traditional energy efficiency industries. Peru lacks complete supply chains in each of these sectors, indicating that any RE&EE development will result in imports, supporting opportunities U.S. exporters that should be well positioned to compete effectively in the market. In particular, exporters that manufacture bearings, gearboxes, turbines, and blades for the wind industry, as well as wafers, cells, modules, and invertors for the solar industry should all find opportunities. Opportunities also exist for geothermal service exporters, including firms capable of providing exploration, production, and resource confirmation expertise. And for companies capable of supplying equipment or services to support ethanol or energy-from-waste development.

MISSION GOALS

The RE&EE trade policy mission will facilitate the development of an export market by supporting the establishment of policy incentives in Peru’s emerging RE&EE market. The mission will occur at an opportune time, as Peruvian policy makers seek to establish policy environment to support RE&EE investment prior to the COP-20 meetings in December.

The delegation will have the unique opportunity to meet government officials, discuss policy concerns, and suggest creative solutions to Peru’s energy challenges. Topics relevant to Peru’s RE&EE expansion include:

  • Rural electrification: Fourteen percent of the Peruvian population lacks access to reliable electricity. The Peruvian Government has announced plans to boost the electrification rate to 95 percent by 2015 through the deployment of solar technologies.
  • Electricity prices: The Peruvian Government keeps electricity rates artificially low through direct subsidies, which limit opportunities for efficiency and make renewable energy investment difficult.
  • Financing: local financial institutions appear unwilling to invest in renewable energy or energy efficiency projects, leaving the market to be sustained by international investors.
  • Biofuels: Peru has struggled to meet its biofuel blending target, which was established in 2007 and mandates that 7.8% ethanol be blended into the country’s gasoline stock, due to limited biofuel production and a lack of operations and maintenance supplier.

SCHEDULE OF EVENTS

Date

Day

Activity

November 11

Tuesday

Lima, Peru

Arrive in Lima, Peru

  • Welcome reception (in the evening)
  • Market briefing on RE&EE industry in Peru for mission participants by US&FCS Lima and Embassy staff

November 12

Wednesday

Lima, Peru

  • Meetings with key Government officials and stakeholders

November 13

Thursday

Lima, Peru

  • Seminar or Forum on RE&EE development in Peru hosted by AmCham Peru; or additional group meetings
  • Networking reception at Ambassador’s Residence
  • Mission ends

November 14

Friday

Lima, Peru

Depart Lima, Peru

*Additional details on the mission’s schedule will be filled in as appropriate.

PARTICIPATION REQUIREMENTS

All parties interested in participating in the trade mission must complete and submit an application package for consideration by the Department of Commerce. All applicants will be evaluated based on their ability to meet certain conditions and best satisfy the selection criteria as outlined below. A minimum of 10 and maximum of 25 companies will be selected to participate in the mission from the applicant pool. U.S. companies already doing business in Peru as well as U.S. companies seeking to enter to the Peruvian market for the first time may apply.

Selection will be based on the following criteria:

  • Suitability of the company’s products or services to the market;
  • Applicant’s potential for business in Peru and in the region, including likelihood of exports resulting from the mission;
  • Consistency of the applicant’s goals and objectives with the stated scope of the mission;

Each applicant must also certify that the products or services it seeks to export through the mission are either produced in the United States, or, if not, marketed under the name of a U.S. firm and has at least 51 percent U.S. content of the value of the finished product or service.

FEES AND EXPENSES:

Large Company

$2,300

Small and Medium-Sized Company*

$1,300

Additional Participant – regardless of company size

$500

* An SME is defined as a firm with 500 or fewer employees or that otherwise qualifies as a small business under SBA regulations. Parent companies, affiliates, and subsidiaries will be considered when determining business size. The dual pricing reflects the Commercial Service’s user fee schedule that became effective May 1, 2008.

The mission fee does not include any personal travel expenses such as lodging, most meals, local ground transportation, except as stated in the proposed timetable, or air transportation to and from the United States. Business visas are not required.

Contacts:

Ryan Mulholland

Senior Renewable Energy Trade Specialist

Office of Energy and Environmental Industries

Phone: (202) 482-4693

Email: Ryan.Mulholland@trade.gov

Ricardo Peláez

Commercial Counselor

U.S. Embassy – Lima, Peru

Phone: +(51) 1-618-2440

Email: ricardo.pelaez@trade.gov