Countries › Peru › Guide › 12. Sectors › Renewable power in Peru: what counts as RER, priority dispatch, Osinergmin premium auctions, accelerated depreciation and the end of the 5 percent target

Renewable power in Peru: what counts as RER, priority dispatch, Osinergmin premium auctions, accelerated depreciation and the end of the 5 percent target

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

Peru's renewable energy regime (RER) covers biomass, wind, solar, geothermal and tidal power and hydro plants up to 20 MW. RER plants are dispatched first by the system operator COES as if their variable cost were zero, and get priority access to spare grid capacity. Osinergmin can auction premiums for RER projects, paid through a surcharge on the transmission connection toll, so that winning plants earn the market price plus a premium up to their awarded tariff. Hydro and other renewable plants may also depreciate plant and civil works at up to 20 percent a year for income tax. Ley 32249 of January 2025 repealed the five yearly target share for renewables in national consumption, so new projects compete mainly in distributor tenders and free contracts rather than in target driven auctions.

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

Maximum hydro capacity counted as renewable energy resource (RER)	20 MWDL 1002 art. 3, as of 2026-10-28 · in force
Maximum annual accelerated depreciation for hydro and renewable plants	20 %DL 1058 art. 1, as of 2026-10-28 · in force
Five yearly RER target share in national consumption (repealed)	up to 5 %DL 1002 art. 2.2, repealed by Ley 32249, as of 2026-10-28 · repealed

The rule

1. Renewable energy resources (RER) are biomass, wind, solar, geothermal and tidal energy, and hydro power where installed capacity does not exceed 20 MW. The regime applies to RER generation entering commercial operation after the decree took effect; new operations using RER as primary energy may opt in after accreditation with the Ministry of Energy and Mines. Electrical rights are obtained under the Electricity Concessions Law (definitive concession above 500 kW).
Cost to do it: No fee in the decree; concession and EIA costs follow the electricity concessions regime.
Example: A 15 MW run of river plant in Junín qualifies as RER; a 60 MW hydro plant does not and follows the general regime. / A US$25 million 20 MW hydro plant is at the RER ceiling; at 21 MW it falls outside.Decreto Legislativo Nº 1002, promoción de la inversión para la generación de electricidad con el uso de energías renovables (published 2 May 2008), Osinergmin copy, Art. 1 and 3, 2008-05-02 official text · verified 2026-10-28

2. RER generation has priority in the daily dispatch by COES and is treated as having a variable production cost of zero. To sell, RER plants place their energy in the short term market at the market price, complemented by the premium set by Osinergmin when the marginal cost is below the tariff Osinergmin determined. Tariffs and premiums are set to guarantee a return no lower than that in art. 79 of the Electricity Concessions Law.
Cost to do it: No fee; the premium is funded by consumers (rule 3).
Example: A wind farm with an awarded tariff above the hourly marginal cost receives the market price plus the premium needed to reach its tariff. / Priority dispatch means a solar plant runs whenever the sun shines, regardless of gas prices.Decreto Legislativo Nº 1002, promoción de la inversión para la generación de electricidad con el uso de energías renovables (published 2 May 2008), Osinergmin copy, Art. 5, 2008-05-02 official text · verified 2026-10-28

3. Osinergmin auctions the allocation of premiums to each RER project following guidelines from the Ministry; bids include the transmission lines needed to connect to the national grid (SEIN). The difference needed to cover RER tariffs is collected from users through surcharges on the connection toll in art. 61 of the Electricity Concessions Law and paid to generators through COES transfers; Osinergmin sets the expected surcharge each year, including the settlement of the previous year.
Cost to do it: Bid bonds and terms are set in each auction's rules; connection costs are part of the bid.
Example: An auction winner builds its own line to the nearest SEIN substation because the bid price had to include it. / Consumers fund the premium through the connection toll surcharge, so auction volumes are a policy choice.Decreto Legislativo Nº 1002, promoción de la inversión para la generación de electricidad con el uso de energías renovables (published 2 May 2008), Osinergmin copy, Art. 7, 2008-05-02 official text · verified 2026-10-28

4. Where transmission or distribution capacity exists, RER generators have priority to connect up to the annual target share set by the Ministry under art. 2. Art. 2.2, which required the Ministry to set every five years a target share of RER (excluding hydro) in national consumption, up to 5 percent a year in the first five years, was repealed by Ley 32249.
Cost to do it: No fee.
Example: After January 2025 the Ministry no longer sets five yearly RER targets, so the cap on priority connection in art. 8, which is tied to that target, has lost its reference. / Investors should treat priority grid access as uncertain and secure connection capacity contractually.Decreto Legislativo Nº 1002, promoción de la inversión para la generación de electricidad con el uso de energías renovables (published 2 May 2008), Osinergmin copy; Ley Nº 32249 (El Peruano 19 January 2025), sole repealing provision, DL 1002 art. 2 and 8; Ley 32249 sole repealing provision, 2025-01-19 official text · verified 2026-10-28 · changed: Ley 32249 repealed DL 1002 art. 2.2 (five yearly RER target, up to 5 percent in the first five years).

5. Electricity generation from water or other renewable resources (wind, solar, geothermal, biomass, tidal) enjoys accelerated depreciation for income tax. It applies to plants entering commercial operation after the decree took effect, for machinery, equipment and civil works needed to install and operate the plant acquired or built after that date, at an overall annual rate of up to 20 percent, which the generator may vary each year after notifying SUNAT.
Cost to do it: No fee; notify SUNAT of the rate chosen each year.
Example: A solar plant costing S/ 345,200,000 can deduct up to S/ 69,040,000 a year, worth about S/ 20,366,800 of income tax a year at 29.5 percent, so the cost is recovered for tax over five years. / For a US$100 million plant: up to US$20 million a year of depreciation, about US$5.9 million a year of tax deferral at 29.5 percent.Decreto Legislativo Nº 1058 (El Peruano 28 June 2008), original text, Art. 1, 2008-06-28 official text · verified 2026-10-28

Worked example

A US$100 million (about S/ 345,200,000) solar plant in Moquegua gets a definitive concession (above 500 kW), is dispatched first by COES, sells to a mining company under a free price contract or to distributors in a tender, and depreciates the plant at up to 20 percent a year, deferring about S/ 20,366,800 (about US$5.9 million) of income tax a year in the first five years.

Step by step

Confirm the plant qualifies as RER (hydro only up to 20 MW) and seek accreditation with MINEM to use the regime (DL 1002 art. 1 and 3).
Obtain a definitive concession if above 500 kW and the environmental certification.
Choose the route to market: Osinergmin premium auction when called, distributor tenders under Ley 28832, or free price contracts.
Secure grid capacity; priority connection is no longer tied to a live target after Ley 32249.
Notify SUNAT each year of the accelerated depreciation rate used (DL 1058 art. 1).

Common traps

Hydro above 20 MW is not RER, so it gets neither priority dispatch as RER nor the premium regime (DL 1002 art. 3).
Accelerated depreciation applies only to assets acquired or built after DL 1058 took effect and to plants entering operation after that date.
Premiums are only available through Osinergmin auctions; there is no open feed in tariff.

Sources

← Electricity in Peru: concessions and authorisations, free and regulated prices, distributor tenders and the 2025 reform of Ley 28832Telecommunications in Peru: the single concession, 20 year terms, spectrum, the 0.5 percent operating charge and the 1 percent FITEL contribution →

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