Garcia says Peru not in midst of an energy crisis

By Jean Luis Arce

LIMA, Aug 13 (Reuters) - Peruvian President Alan Garcia worked to calm concerns about the country's growing, if temporary, energy shortage on Wednesday, saying Peru is not in the midst of a crisis.

In the last two weeks, Peru has experienced two blackouts as spiking demand, a shortage of rains and poor infrastructure have combined to crimp power supplies. Garcia has met with energy industry leaders to discuss the problem.

"There is no energy crisis. What happened is that it rained less this year -- so the growth in electric energy created with gas has to compensate for electric energy produced by hydro power," Garcia told reporters.

Demand for electricity is growing at a rate of 12 percent a year in Peru, where domestic demand is booming as the economy, after seven years of growth, is expanding at about 8 percent a year.

Historically, some 70 percent of the country's power is supplied by hydroelectric plants. But fewer rains this year have forced the country to rely more on power generated by natural gas or other energy sources like diesel, which is more expensive.

Peru has huge natural gas reserves, but there is just one pipeline that moves it from the Camisea field in southern Peru to Lima, the country's capital.

Shortages have already hit some of Peru's largest companies, among them miners, though none have reported production losses.

The head of Peru's national industry association, Eduardo Farah, warned of "fatal" consequences if manufacturers were made to to cut their use of electricity, though the government has said a rationing program is unlikely.

"Production cannot stop. If we stop production, inflation will rise. The consequences will be fatal for many people," Farah said on local radio. (Writing by Dana Ford; Editing by Marguerita Choy)