What is your critical assessment on the current status of Peru's energy sector?
Right now the market is characterized by an oversupply, meaning that we have to find a balance. We have an energy surplus (+49%), and when you have electricity excess in the market, the prices go down for generators. According to our research, next year we will reach a 70% surplus. Peru is planning to export the energy surplus to Chile, Ecuador, and Brazil. Peru currently sees a strong market in Chile, because they don't have many energy resources and have high costs compared to Peru. Since the country wants to sell and they want to buy, that's the ideal market. The issue is that the importing countries need to establish regulations. If there was willingness and successful integration, we could have energy being rapidly transported from Mexico to Chile. Peru is located in the middle of the Pacific in the whole continent, so it could be a good link and power transmission center for all South America. Apart from that, the transmission is much improved; in ten years the transmission lines have been doubled. Between 2002 and present day, transmission increased from 5,000km to almost 10,000km, and the power also tripled.
How are you planning to expand the existing grid?
The expansion plan from now until 2020 is very ambitious—around $1.8 billion for transmission and $25 million for generators. The energy and mining sectors are driving and shaping demand. Different calculations and analysis are also made depending on the region; right now, the 60% is focused on Lima, the growth developing in the south is related to mining, and in the north we are growing as well.
How much is the group investing in maintenance, minimizing electricity loss, and upgrading existing transmission lines throughout the country?
Since 2000 we have managed a system called Reliable Centered Maintenance (RCM) that helps us to work on our maintenance plan. We have a plan based on the machine's reliability; we check the failure analysis, the hidden failures, and we have a special maintenance plan. To boost the efficiency of our operations, we invest in a specialized team, and our staff is involved in the maintenance with the technology that supports those maintenance plans. Human resources is important in the medium and long term because the electric engineering career path is very technical. Previously, many people studied electric engineering, but now young people are trending more toward administrative careers over technical careers. We have to work hard to attract talent, we have agreements with universities, we try to create technology, and talk to the private sector. We need people that are prepared because every day we have more technology and development, and there are more skills being required.
ISA has recently entered the Dow Jones Sustainability Index. What factors elevate the group as a leading international player in this field?
We need to be sustainable over time, and this is just part of what we do to stimulate development. We have been recognized for managing high world standards indicates that we can work with financial resources, influencing shareholders to support us, and shape investors impressions of the company. We analyze all the opportunities and risks with the social and environmental sustainability of the country in mind.