«PUQUIAN» Hydropower Project

This run of the river project will be built upstream of the existing CAHUA hydro power plant and downstream of the Curquish Project, the configuration is in cascade, then Puquian Plant will receive water discharged from the Curquish Plant (water resource from Huayllapa & Pumarinri rivers), with 4.8 km of conduction tunnels and a power house that will be built in a cavern with two Peltom units with a total height of 790 meters. The project does not need facilities to regulate its energy production. The project plans to have an installed capacity of 106 MW and an estimated annual energy production of 531 GWh.

Baseline Scenario

Which emissions are the proposed Clean Development Mechanism CDM project displacing?
«PUQUIAN» Project is a medium scale CDM project and will displace GHG emitted by thermal power plants using diesel, residual (bunker), carbon and natural gas as fuel from the national grid.
What would the future look like without the proposed CDM project?
We foresee that the new capacity added to the grid in the future will be basically thermal power plants burning natural gas in combined cycle plants, which will replace most of the other plants operating with oil, coal and other fossil fuels. National policies, energy sector policies and the new natural gas exploitation of «Camisea» lead to particular circumstances that tend to foster thermal technology against hydro-developments.
What would the estimated total greenhouse gas (GHG) reduction be with the project?
According to the Consolidated Methodology ACM0002, the World Bank Carbon Finance Business in a study done in December 2004 got a Baseline Emission Factor of 544 tCO2e/gwh. Using that emission factor it is expected that «PUQUIAN» project will displace around 288,864 tCO2e/year which otherwise will be emitted by thermal power with diesel, residual (bunker), coal and natural gas.

Current Status

Earliest project start date
The preliminary design was complete in December; the geologic study including field test & investigation will finish in August 2005, then the final design & feasibility will be finished in December 2005.
Estimate of time required before becoming operational
We plan to complete the project in June 2010.
What is the project lifetime?
50 years
Current status or phase of the project eg: which of the following phases have been completed:
• Energy and water concession for studies have been already given.
• Cahua’s board approved go ahead with the final design & feasible study.

Estimated Emission Reductions

Annual: an average of 288,864 tCO2e

• Up to and including 2012: 433,296 tCO2e
• Up to a period of 7 years: 2,022,048 tCO2e
• Up to a period of 10 years: 2,888,640 tCO2e
• Up to a period of 14 years: 4,044,096 tCO2e

Project Benefits

• 2000 indirect jobs during construction works.
• The project will create new jobs, will promote sustainable development of the surroundings of the project (local communities) and in general shall contribute to the economic growth to a big portion of the country by supplying more clean and cheap energy through the interconnection of the project to the national grid.
• Displace around 288,864 tCO2e/year which otherwise will be emitted by thermal power with diesel, residual (bunker), coal and natural gas
• Increase the participation of the hydro-power generation in the Peruvian electricity demand.

Project Participant and Financing

Total project cost estimate:
• Development cost: US$ 5,119,000
• Equipment cost: US$ 42,300,000
• Civil works: US$ 39,500,000
• Total project costs: US$ 86,895,000

Sources of finance to be sought or already identified:
• Equity: US$ 18,000,000 (shareholders and other investors, to be determined before completion of feasibility analysis)
• Debt : US$ 68,895,000 through project finance/capital markets (local or foreign, to be determined before completion of feasibility analysis)
• Carbon finance contribution sought: As much as we can have in advance.

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