Energy Projects and Reduction of Socio-Environmental Impacts

1. Energy Projects and Reduction of Socio-Environmental Impacts Manuel Pulgar-Vidal Minister of Environment Energy Day July 3, 2012 Swissotel

2. Content 1. A memory exercise 2. Energy and environment in Peru 3. A new energy matrix 4. Energy and environmental health 5. Energy and biodiversity 6. Energy and climate change

3. 1. How to approach the future in the context of the new administration Develop public policies based on learned lessons and challenges Recognizing the complexity of the context Identifying consequences of planning Developing a realistic route map

4. What have we learned? • Camisea commitments: • Compliance with environmental and social obligations • Creation of a Fund • Protection to isolated populations • Transparency in EIAs. EIA monitoring. • Environmental strategic planning • Regional planning. Zoning. • Technical assistance to local authorities • Access to justice • Compensation Regime • Consultation and dialogue • Enforcement

5. What are we forgetting? • Information importance. Thermoelectric Case • Properly inform the message. There seem to be no suitable energy source. • Energy for whom? • Energy Saving Campaigns, Smart Buildings (Real Estate Sector)

6. Recognizing the complexity of the context State control over natural resources Natural resources in relation to new challenges Private property and titling . Soil and subsoil dilemma Environmental Management Instruments Promoting governance in natural resources access and use Land and territory Amazon Superposition of rights and operating licenses Investment promotion Decentralization and institutional framework Income and profit distribution given by the use of natural resources

7. 2. Energy and environment in Peru Climate change Environmental health Energy Biodiversity and territory occupancy

8. 3. Newenergy matrix NUMES Objective: Gross domestic supply of primary and secondary energy DISTRBUTED GAS NON-ENERGY PRODUCTS AND OTHERS POWER ENERGY DERIVATIVE OIL PRODUCTS AND NATURAL GAS LIQUIDS CRUDE OIL NATURAL GAS RRE HYDROPOWER MINERAL COAL Required investment and new installed capacity Investment amounts - Millions US$ New capacity - MW Technology Hydro Thermal Wind Solar Geothermal Biomass

9. Environmental indicators in NUME’s proposal • GHG emissions originated by production and use of energy. • Reduction of pollutant emissions from transport. Increase in biodiesel percentages. • Impact on wildlife. Large hydroelectric power plants. • Threats to PNAs and sites of outstanding biodiversity.

10. Environmental indicators in NUME’s proposal • Energy matrix vulnerable to natural hazards. Hydroelectric power plants and pipelines. • Energy matrix vulnerable to climate change. • Basins affected by energy projects.

11. Other potential indicators that cause conflicts • Decentralization • Benefits from energy, in particular, and from infrastructure, in general. • Trans-sector

12. 4. Environmental Health: How are we doing? Índice de Desempeño Ambiental 2012 Source: Yale University, 2012

13. Conversion to natural gas and sulphur control Conversion to natural gas (136,600 vehicles) causes decreasing trend in particulate matter PM10, but it is still well above the EQS of annual air of 50 micrograms/m3. Particulate Matter Micrograms/ m3 concentration Years Reduction of sulphur content in diesel to 50 ppm has been expanded to Lima, Callao, Arequipa, Moquegua, Cuzco, Tacna and Puno, bringing significant reductions despite the vehicle fleet growth. Sulfur Dioxide Micrograms/ m3 concentration Years

14. Fuel Hazard Index and Selective Consumption Tax (SCT) "Clean" fuels and the less polluting cars have been favored by a major reduction in tax. Fuel Hazard Rate Hazard Index SCT (S/. per gallon) Fuel Fuel LPG Gasoline 90 Gasoline 95 Gasoline 97 Kerosene Diesel 2-S2500 Residual 6 * Year in which SCT converge with its final value.

15. 5. Biodiversity and Territory Occupancy • Insufficient information about the biodiversity importance; • Conflicts caused by superposition of oil lots and hydroelectric projects with protected areas and other important ecosystems in the provision of ecosystem services; • Marine environment is particularly "unknown" and it was NOT CONSIDERED IN NUMES’s SEA!!!

16. Ecoregional Planning

17. Ecoregional Planning Priority sites for biodiversity conservation in the Venezuelan Caribbean

18. Environmental Restore Avoid Restore Minimize Fuente: Kiesecker, J. et al.

19. 6. Climate change impact on water disposal Retreat of seven Andean glaciers

20. GHG emissions in energy sector, 2000 Total GHG emissions Source: Source: • Inventory as of 2000 does not recognize increase effects of vehicle fleet (+) or conversion to natural gas (-); • Projections to 2050 with baseline in 2000 expect to triple GHG emission levels compared to 2000; • Projections for proposal of new energy matrix and its assumptions need to review.

21. Planning for Climate Change PlanCC seeks: “… generate quantitative evidence on possible scenarios for mitigation of climate change in Peru, strengthen capacities and establish the basis for a long-term low economic growth in carbon.