Seminar  "Sustainable development of rural areas"

Marrakech, 13 - 17.11.95

Seminar Proceedings pp 643 - 647






Manfred Horn and Rafael Espinoza


Centro de Energías Renovables, Universidad Nacional de Ingeniería,

Casilla 31139, Lima, Peru;  Telefax 0051-1- 4810824, or - 4818395;

email: (M.Horn) and (R.Espinoza)




About half of the 23 millions of Peruvians do not have electricity. Most of them are living in rural areas. Only decentralised photovoltaic electricity represents a feasible possibility for them within the next 10 - 20 years.


There is a general awareness of this situation, but till now there does not exist a national programme for decentralised electrification. This foreseen programme must fit in the general free market policy of the Peruvian Government.  This implies that domestic electrification will not have Government subsidies


Since 1994 the Peruvian Government has financed, exclusively with own funds, three photovoltaic projects, each with a budget of $ 100,000 - 150,000  for communal as well as domestic applications. These projects, executed by the National Engineering University (UNI),  are aimed to demonstrate a technical and organisational valid scheme  for future dissemination programmes.




            Following the proposal  of the organisers of the International Seminar on Decentralised Rural Electrification, to be held on November 13-17, 1995,  in Marrakech, the authors  of the present paper tried to describe the  present situation and the perspectives of decentralised rural electrification In Peru.


            During the last years profound changes are going on in the Peruvian society, on a basis of free market economy and  reduction of Government involvement. Within this development, there still does not exist an official policy for rural electrification. The arguments and information presented here are therefore only the personal opinions of the authors  (*)  and do not necessarily represent the opinion of their institution nor of the Peruvian Government.  It has also to be stated that, as a consequence  of these changes ( and the fact that Peru is an underdeveloped country),  it is difficult to have correct  statistical figures and  most numbers given in this paper have to be taken as referential only.


State of rural electrification


            Twenty-five years ago, Peru was one of the most electrified South-American countries, but this situation has changed drastically:  by now only about half of the 23 millions of Peruvians have  electricity service,  with a yearly electricity consumption of 600 kWh/hab  (60 % from hydro energy, the rest from oil), well below the South- American average. In rural areas, where about half of  all Peruvians are living, the situation is much worse: only 16-18 out of 100 people in rural regions have electricity. The average electricity consumption in rural areas is 32 kWh / hab and year, and in many  poor regions of the country the electricity consumption is even lower /1/.


            Based on the new economic model of  development of the country, a new Law of Electrical Concessions  was approved, the electricity tariffs were liberalised and the public electricity utilities (generation and distribution) are now privatised. The Government assumes only  the function to establish the  rules, to supervise and, in case of necessity, to canalise resources in order to subsidise the investments, in a direct and transparent way ( using channels of the market). Through the concessions the private sector will have a decisive role in the construction and operation of electricity installations, including in the rural sector.


            Within the National Plan of Electrification, with private investments and support through international development banks, the projection is to increase the areas served with grid by 3 - 4 % yearly. This would mean that in the year 2000 about 70% of the population will have electricity.


            Considering the low population density of most rural areas ( Peru has an area of 1.3 million square kilometres), it is however nearly impossible to extend the grid to a substantial part of the rural regions, leaving  , even within ten years, 3 to 8 millions without electricity (the population is growing at 2% yearly). For most of them, only decentralised local generation of electricity will represent a achievable solution.



            The electrification of isolated, remote rural regions of Peru, as well as the use and development of new and renewable energies in general,  was characterised in Peru during the last 10 years basically by the following two factors /2/:


            - On one side, the general political and economical situation of Peru: after years of heavy subsidising all basic services, including electricity, oil etc., resulting in a hyperinflation and a virtual bankruptcy of the Government, since 1990 exists a free market economy policy, without any subsidies, flat 15% importation custom fees, privatisation of all  Government companies, resulting in an economical recession. In addition, since 1980 the Shining Path terrorism was growing steadily, paralysing virtually the country and resulting in more than 25000 dead and tens of billions of dollars of destroyed public and private property. Only during the last years this tendency could be inverted, resulting that today the country is practically free of terrorism.


            - On the other side, the promotion of  renewable energies in most developing countries is strongly supported by the international co-operation. This technical international co-operation has however practically disappeared in Peru after 1985: first, because of the declared policy of the former Peruvian Government not to pay its external debts, then because of severe security reasons caused by "Sendero Luminoso" (Shining Path), resulting in the retirement of all foreign experts from Peru, and finally, because of the "coup d'etat" in 1992 of the new Government.


            These two negative factors are being overcome now: since two years a strong economical growth is observed, based on private initiatives, the terrorism is practically eliminated and also the international co-operation is returning to Peru.


            During the last years there  was practically  only one  experience in the country in the area of  photovoltaics, described in the following chapter.



The Puno project


            Since 1986, till now, is realized on in the region of Puno (Andean plateau at 4000 m above sea level, in the south-east of Peru, near Titicaca Lake)  a project of photovoltaic solar home systems (SHS)  /1/. This project was started and mainly financed by the German Technical Co-operation (GTZ). The Peruvian counterparts were, changing during the years, different regional government development agencies.


            In the initial stage, the goal of the project was to determine the social acceptance of this technology by the indigenous rural population in the Puno region and the technical viability of the different parts of the system. The idea was also to promote the local production (except the PV module). The basic system consists of a 40-50 Wp PV module (different brands), a 100-150 Ah starter battery, 3-5 fluorescence tubes of 9-20 W with different electronic ballast’s, a battery charge regulator and a radio outlet.


            As a result, it can be stated that the advantages of the PV technology were recognised by the users and also that the technology proved to be adequate, despite some problems, mainly with  the electronic ballasts for the fluorescence lamps.


            The Project intended also to evaluate the economical viability  of the SHS, based on a free market concept (the user has to pay the SHS with payments during some years), for the about 300 systems installed. But the hyperinflation in Peru during the years in which most SHS were installed (1986 - 90) and the Shining Path terrorism during the same time (resulting in the retreat of the German co-operators), made it practically impossible to get return payments from the users.


            During the last years, the Project, with very limited financial  support, is  continuing with the installation of few communal PV systems and SHS, using a still existing stock of SHS, for sales on a free market price bases and a revolving fund scheme.


            There doesn’t exist a recent independent evaluation of the Project, which would permit to assess its real technical, social and economical situation.



Perspectives of rural decentralised electrification


Older programs and assessments of perspectives, made during former Government administrations /3/-/4/ are now invalid because of a new political and economical reality. However, the  new Government, in charge since 1990, still has not defined its policy for  decentralised rural electrification.


In July of the present year the Ministry of Energy and Mines and CENERGIA [1] organised a workshop on “electrification of remote and isolated localities” with the objective “to  gather personalities and representatives of national and international organisms, companies and institutions involved in electrification in order to interchange experiences which will help to formulate national policies and strategies in order to continue in an accelerated way with the electrification of isolated and remote localities of the country in order to support the integral development of Peru”. During this workshop, the MEM presented its view on the subject /4/, but till now,  there does not exist an official document on the eventual results of the workshop.


            On the other hand , the Government, through its Ministry of Energy and Mines (MEM), has started three pilot projects  to “determine the technical, economical and social viability of the utilisation of renewable energies  for electricity generation in rural isolated human settlements, whose results will serve to elaborate strategies and activities that should be followed by the Government in order to introduce these technologies in these areas.” All 3 projects are financed completely by own Peruvian Government’s funds.


            These 3 pilot projects are described briefly in the following:


Communal Pilot-Project


            In  February 1995 the MEM has signed an contract with CER - UNI (Centro de Energias Renovables , Universidad Nacional de Ingeniería) in order to install  in 8  communal  centres renewable energy supplies, with telecommunication facilities (colour TV with satellite reception, VHS, short wave radio). The cost of the project is US-$ 150 000. In 4 communities battery wind chargers ( local fabrication, each 1000 W) were installed, and in 4 communities photovoltaic arrays, each 400 Wp.  Besides the communication equipment, each centre has a eight  9 W fluorescence lamps, a 20 W street lamp and a 1600 W inverter for 220 VAC. In each place  a maintenance service is built up on a private commercial base, paid by the local community. It will also be evaluated to which extend the local community can use the available excess energy for other purposes, specially productive ones.



Solar Home Systems Pilot-Project


            In September 1995 the MEM has signed a contract over US-$ 120 000 with CER-UNI. According to this contract, CER-UNI will install in a remote village 75 domestic Solar Home Systems (SHS) and a communal photovoltaic system. Each SHS will consist of a 50 Wp module, a charge regulator, a 100 Ah battery, three 9 W fluorescence lamps and a radio /TV outlet. The project foresees that the SHS have to be repaid by their users, who will be finally the owners of the system. Accordingly, a community will be selected with economical possibilities for repayment.


Social Domestic  PV Electrification Pilot-Project


            The MEM is  acquiring 250 photovoltaic systems (similar to those ones described in the above chapter). For this purpose it contracted the local UNDP office in order to make an international bid. This bid has concluded and these 250 systems will arrive soon in Peru. It is foreseen to install them in  1- 3 rural poor communities which require direct support from the Government.


            The MEM is now discussing with CER-UNI in order to make a proposal for a project for the installation of these systems, including the selection of the communities and  the follow-up evaluation. It is expected that the installation and maintenance service will be done by a private company. In this project,  the minimum cost for the users of the PV systems will be the maintenance cost (including eventual replacements of lamps and batteries).





/1/  R.Espinoza & M.Horn: “ Electrificación Rural con Sistemas Fotovoltaicos”, 129 pages, CER-UNI, Lima ,1992


/2/  M. Horn: “Situación de las energías nuevas y renovables en el Perú”, Memorias del V Simposio Peruano de Energía Solar, pp 101- 110, Cajamarca, Perú, 21-25.11.94


/3/  MEM/PNUD: “Propuesta para un plan nacional de desarrollo de las fuentes de energías nuevas y renovables”, agosto 1989


/4/  JUNAC: “Estado actual de las fuentes de energías nuevas y renovables en el grupo andino”, 1989


/5/  J. Beoutis: “ Experiencia del pasado reciente y actual en roles de los diferentes actores e institucionalización del proceso de Electrificación de localidades aisladas y remotas, en el Perú”, Seminario-Taller sobre Electrificación de Localidades Aisladas y Remotas, organizado por el MEM, Lima, 1-2.06.95


(*)  The authors are university professors, involved since 20 years in Peru in  research, training and the development and dissemination of technologies in the field of renewable energies, mainly solar (solar drying, photovoltaics, etc.).


[1]  CENERGIA , “ Centro de Conservación de Energía y del Ambiente”, is a NGO associated  narrowly with the Ministry of Energy and Mines, with activities in the field of conservation of energy and ambient, including the use of renewable energies.