Countries › Peru › Guide › 12. Sectors › Electricity in Peru: concessions and authorisations, free and regulated prices, distributor tenders and the 2025 reform of Ley 28832

Electricity in Peru: concessions and authorisations, free and regulated prices, distributor tenders and the 2025 reform of Ley 28832

Last verified: 2026-10-28 · Status: Changing

Peru's power sector is open to private and foreign investors. Hydro and renewable plants above 500 kW, transmission that uses State property or easements and distribution above 500 kW need a definitive concession from the Ministry of Energy and Mines; thermal plants above 500 kW need an authorisation; smaller activities only need to be reported. Concessions and authorisations are granted for an indefinite term, except those awarded by public tender, which last at most 30 years. Large consumers buy at freely agreed prices, while regulated users are supplied through distributors that buy power in tenders under Ley 28832. Ley 32249 of January 2025 reshaped those tenders: long term contracts are capped at 15 years, purchases may be split into energy and capacity blocks, existing contracts cannot be extended or increased, and a market for ancillary services applies from 1 January 2026.

USD figures use S/ 3.452 per US dollar, the banking system selling rate published by the Superintendencia de Banca, Seguros y AFP for 27 October 2026, from the Banco Central de Reserva del Perú statistics series PD04640PD. UIT based amounts use the 2026 UIT of S/ 5,500 set by Decreto Supremo Nº 301-2025-EF, as cited in SUNAT Resolución de Superintendencia Nº 000016-2026/SUNAT. Conversions are for orientation only.

Key facts

Installed capacity above which hydro and renewable generation needs a definitive concession	500 kWDL 25844 art. 3 as replaced by DL 1002, as of 2026-10-28 · in force
Installed capacity above which thermal generation needs an authorisation	500 kWDL 25844 art. 4 as replaced by DL 1002, as of 2026-10-28 · in force
Maximum term of definitive concessions awarded by public tender	30 yearsDL 25844 art. 22 as replaced by DL 1221, as of 2026-10-28 · in force
Maximum term of distributor long term tender contracts	15 yearsLey 28832 art. 5.1 as amended by Ley 32249, as of 2026-10-28 · in force
Maximum gap between regulated bar price and average contract prices	10 %Ley 28832 second final provision as amended by Ley 32249, as of 2026-10-28 · in force
Unjustified idle hours in a calendar year that cause a definitive concession to lapse	876 hoursDL 25844 art. 36 c) as replaced by DL 1221, as of 2026-10-28 · in force
Grandes Usuarios (free users or groups with contracted capacity of at least)	10 MWLey 28832 art. 1.12, as of 2026-10-28 · in force

The rule

1. A definitive concession is required for: (a) hydroelectric generation with installed capacity above 500 kW; (b) transmission where the facilities affect State property or need easements imposed by the State; (c) distribution as a public electricity service where demand exceeds 500 kW; and (d) generation with renewable energy resources above 500 kW. An authorisation is required for thermoelectric generation above 500 kW. Activities that need neither may be carried out freely, complying with technical, environmental and cultural heritage rules, and must report their activity to the Ministry as set in the regulation. Concessions and authorisations are granted by the Ministry of Energy and Mines and recorded in a single national register.
Cost to do it: Filing fees are set in the MINEM procedures text (TUPA) and were not verified here; the main costs are studies, the EIA, guarantees and the public deed.
Example: A 150 MW solar plant in Arequipa needs a definitive generation concession; a 50 MW gas fired peaker needs an authorisation; a 400 kW rooftop plant needs neither and only reports to MINEM. / Thresholds are in installed capacity, not investment: a US$1 million 600 kW diesel unit needs an authorisation, while a 450 kW unit does not.Decreto Ley Nº 25844, Ley de Concesiones Eléctricas (dated 6 November 1992), Osinergmin consolidated copy, art. 3 and 4 as replaced by Decreto Legislativo Nº 1002 (2 May 2008), art. 6 and 7 as replaced by Decreto Legislativo Nº 1221 (24 September 2015), Art. 3, 4, 6 and 7, 1992-11-06 official text · verified 2026-10-28 · changed: DL 1002 lowered the hydro concession threshold from 20 MW (set by Ley 28832 in 2006) to 500 kW and added renewables above 500 kW; DL 1221 created the single national register of concessions.

2. Definitive concessions and authorisations are granted for an indefinite term. Definitive concessions awarded through a public tender run by the Ministry, or an entity it appoints, last for the term set in the tender, up to 30 years. A temporary concession for feasibility studies of generation and transmission lasts two years and may be extended once, by up to one more year, only where force majeure prevented completing the study schedule.
Cost to do it: Filing fees are set in the MINEM procedures text (TUPA) and were not verified here; the main costs are studies, the EIA, guarantees and the public deed.
Example: A developer holding a temporary concession granted by ministerial resolution published on 1 March 2026 has until 1 March 2028 to complete its studies. / A transmission line won in a MINEM tender with a 30 year term reverts under its contract terms, unlike a hydro plant with an indefinite concession.Decreto Ley Nº 25844, Ley de Concesiones Eléctricas (dated 6 November 1992), Osinergmin consolidated copy, art. 22 as replaced by Decreto Legislativo Nº 1221 and art. 23 as replaced by Ley Nº 29178 (3 January 2008), Art. 22 and 23, 1992-11-06 official text · verified 2026-10-28 · changed: DL 1221 added the 30 year cap for tender based concessions.

3. A definitive concession becomes contractual when the applicant accepts the resolution in writing and signs the contract, which must be raised to a public deed within 60 calendar days of receiving the resolution. For generation, the contract includes the economic and financial study to fix the investment commitment and the penalty for breaching it. A definitive concession lapses, among other causes, if the holder does not prove registration of the contract in the public services concessions registry on time, or does not carry out the works on the approved schedule, unless prevented by force majeure qualified as such by the Ministry or a one time guaranteed works schedule backed by an additional guarantee is approved; it also lapses if the holder stops operating without justification for 876 cumulative hours in a calendar year.
Cost to do it: Notary fees for the public deed and registry fees at SUNARP; guarantees of performance set by the regulation.
Example: If the resolution is received on 2 November 2026, the public deed must be signed by 1 January 2027. / Missing the works schedule on a hydro project can end the concession, so EPC delays are a regulatory risk as well as a commercial one.Decreto Ley Nº 25844, Ley de Concesiones Eléctricas (dated 6 November 1992), Osinergmin consolidated copy, art. 29 as replaced by Ley Nº 27239 (22 December 1999) and art. 36 as replaced by Decreto Legislativo Nº 1221 (24 September 2015), Art. 29 and 36, 1992-11-06 official text · verified 2026-10-28

4. Prices are free for supplies that can be made under competitive conditions and regulated for supplies that by their nature require it, recognising efficient costs. Contracts under the free price regime must separate the generation price at the reference bar from transmission and distribution tariffs, are public, and must be filed with the tariff regulator and Osinergmin within 15 days of signing; failure is fined.
Cost to do it: No fee; non filing within 15 days is fined.
Example: A cement plant buying 20 MW from a generator signs a free price contract and the generator files it with Osinergmin within 15 days. / Free price contracts must show generation and network charges separately, which makes benchmarking against regulated bar prices possible.Decreto Ley Nº 25844, Ley de Concesiones Eléctricas (dated 6 November 1992), Osinergmin consolidated copy, art. 8 as replaced by Ley Nº 27239, Art. 8, 1999-12-22 official text · verified 2026-10-28

5. Under Ley 28832 as amended by Ley 32249, no generator may contract with free users and distributors more firm capacity or firm energy than its own plus what it has contracted with third parties. Distributors supplying regulated users buy through tenders: long term tenders start at least three years ahead, with contracts of up to 15 years; medium term tenders start at least two years ahead, with contracts of up to 5 years; short term tenders start at least one year ahead, with contracts of up to 3 years. Each distributor may tender energy or capacity blocks separately or jointly, and must publish a binding ten year tender schedule updated each year. Awarded offers are those that jointly give the minimum cost of serving the demand over the whole supply term. Contracts carry firm prices that cannot be changed without Osinergmin's approval, and distributors must pass 50 percent of any price reduction to consumers.
Cost to do it: Tender participation costs (bid bonds and studies) are set in each tender's terms.
Example: A distributor needing supply from 2030 must launch a long term tender by 2027 at the latest, for a contract of up to 15 years. / A generator with 300 MW of firm capacity and 100 MW contracted from third parties cannot sell more than 400 MW of firm capacity to distributors and free users.Ley Nº 28832, Ley para asegurar el desarrollo eficiente de la generación eléctrica (published 23 July 2006), as amended by Ley Nº 32249 (El Peruano 19 January 2025), Art. 3.1, 4.4, 5, 7.3 and 8, 2025-01-19 official text · verified 2026-10-28 · changed: Ley 32249 rewrote art. 4.4, 5, 7.3 and 8 and art. 31 on isolated systems, added art. 32 and a new chapter eight on ancillary services, and repealed art. 2.2 of DL 1002 (the five yearly renewable target).

6. The generation bar price set by Osinergmin may not differ by more than 10 percent from the weighted average of tender prices and free user contract prices in force on 31 March of each year; this reference applies only to new contracts signed after the reform. Existing distributor contracts cannot be extended and their quantities cannot be increased, and a sharing mechanism approved by supreme decree applies while old and new contracts coexist. A competitive market for ancillary services, whose cost is charged to whoever causes system instability, applies from 1 January 2026, with providers holding a title from the Ministry.
Cost to do it: No fee; ancillary services become a paid product with its own market.
Example: A battery owner in Lima can seek a MINEM title as an ancillary services provider and sell frequency control in the market that applies from 1 January 2026. / Contracts signed before the reform keep their volumes but cannot be extended, so new supply goes to new tenders.Ley Nº 28832 second final provision and art. 33 as amended and added by Ley Nº 32249; Ley Nº 32249 first, second and fifth final provisions, Second final provision; art. 33; Ley 32249 final provisions 1, 2 and 5, 2025-01-19 official text · verified 2026-10-28 · changed: Ley 32249 replaced the bar price comparison reference and created the ancillary services market (in force 1 January 2026).

Tender	Minimum lead time	Maximum contract term
Long term	3 years	15 years
Medium term	2 years	5 years
Short term	1 year	3 years

Distributor supply tenders after Ley 32249 (Ley 28832 art. 5)

Activity	Title	Threshold
Hydro generation	Definitive concession	Above 500 kW
Renewable generation (solar, wind, biomass, geothermal, tidal)	Definitive concession	Above 500 kW
Thermal generation	Authorisation	Above 500 kW
Transmission using State property or easements	Definitive concession	Any size
Public service distribution	Definitive concession	Demand above 500 kW
Anything below the thresholds	None; report to MINEM	Up to 500 kW

Which title an electricity project needs (DL 25844 art. 3, 4 and 7)

Worked example

A foreign developer plans a 200 MW wind farm in Ica. It first seeks a temporary concession for studies (two years), obtains environmental certification, then applies for a definitive concession; once granted it signs the contract and raises it to a public deed within 60 calendar days. It can sell to free users at agreed prices, filing each contract with Osinergmin within 15 days, or bid in distributor tenders for contracts of up to 15 years at firm prices.

Step by step

Classify the project under DL 25844 art. 3 and 4 to know whether it needs a concession, an authorisation or only a report.
For studies, apply for a temporary concession (two years plus one only for force majeure).
Obtain the environmental certification before the definitive title (see the investing page on environmental certification).
Apply for the definitive concession, publish the application as required, sign the contract and raise it to a public deed within 60 calendar days; register it.
Sell through free price contracts (file within 15 days) or bid in distributor tenders on the published ten year schedule.
From 2026, consider ancillary services as a separate revenue line under the new market.

Common traps

Missing the works schedule is a cause of lapse for definitive concessions; the only escape valves are force majeure accepted by MINEM or a single guaranteed rescheduling with an extra guarantee (DL 25844 art. 36 b), so build realistic schedules into the application.
Contracts of distributors signed before Ley 32249 cannot be extended or increased, so incumbents cannot simply roll over volumes.
Selling more firm capacity than you own or have contracted breaches Ley 28832 art. 3.1.
The Osinergmin copy of DL 25844 shows amendments up to about 2020; check later changes to any article you rely on.

Sources

← Mine closure in Peru: the closure plan, five year reviews, progressive closure, financial guarantees and public noticeRenewable power in Peru: what counts as RER, priority dispatch, Osinergmin premium auctions, accelerated depreciation and the end of the 5 percent target →

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