The short-term outlook for Peru’s power market hinges on a long-awaited regulatory signal: the publication of the implementing regulations for Law 32249. Approved in early 2025, the law set a 120-day deadline for the issuance of its secondary regulations. Nearly a year later, however, there is still no official timeline, leaving more than 12.5 GW of renewable energy projects in limbo, according to the Peruvian Renewable Energy Association (Asociación Peruana de Energías Renovables, SPR).

“In the meetings we held before the end of last year, the Ministry told us the regulations could be published in the first quarter of this year,” said Riquel Mitma, Head of Regulation at EDF Power Solutions and Vice President of the SPR.

So far, only two of the three regulations required under the law have been released for public consultation: those governing renewable energy auctions and the independent system operator for isolated grids. The regulation covering ancillary services—critical for grid stability and market efficiency—remains pending.

Under the original timetable, all three regulations were meant to be approved by May 2025. “Even if they are pre-published now, procedures would only be ready by mid or late this year, meaning auctions would not realistically begin until 2027,” Mitma warned.

At an operational level, the absence of regulations has rendered the law effectively inapplicable. “Today, this legislation cannot be implemented. There can be no auctions and no bilateral power purchase agreements (PPAs),” Mitma said. As a result, the electricity market is at a standstill, with distribution companies lacking legal mechanisms to contract new energy supply.

From the SPR’s perspective, the regulations should not reinforce the status quo but instead open the market to new entrants—particularly companies without 24/7 trading platforms. “Real, transparent and open competition is what will allow the benefits of renewable energy to reach end users,” Mitma stressed.

The stakes are high. “We have 58 projects ready to move forward: 12.5 GW and more than USD 12 billion in potential investment that could be unlocked with a clear signal from the Government,” he added.

This pipeline represents a strategic opportunity for Peru’s energy transition. The country’s interconnected power system is growing by around 500 MW per year. By 2030 alone, between 2.5 and 3 GW of new generation capacity will be required, according to SPR estimates. By 2035, that figure could rise to between 5 and 7 GW—making the stalled renewable portfolio a key pillar for ensuring long-term security of supply.

However, Mitma cautioned that under the current regulatory vacuum, only projects backed by incumbent players with existing platforms are likely to progress. This limits the entry of new technologies and market participants.

“If the regulations are not approved, only those already established will be able to operate. That leads to greater market concentration and prices that do not necessarily fall,” he warned.

Key regulatory principles at stake

Beyond urgency, the SPR argues that the regulations must respect the technical spirit of Law 32249, which was designed to modernise the power system and enable the competitive entry of new technologies.

During the public consultation process, the association submitted a series of recommendations. Among them: separating energy and capacity products, allowing procurement by time blocks, and ensuring that long-term auctions are aimed at new projects rather than existing assets.

“The objective of this law is to bring in new players and new technologies, and that is only possible if the rules guarantee genuine competition,” Mitma said.

Regarding ancillary services, he argued that the regulation should lay the foundations for a transparent market-based mechanism rather than a purely regulated scheme. “There is no better tool than a market to achieve efficiency. Regulation merely tries to replicate it,” he noted.

Mitma also highlighted the case of Iquitos—one of the world’s largest isolated power systems—which requires clear rules and an independent operator to ensure operational security and long-term sustainability, another issue dependent on the pending regulations.

For the renewable energy sector, the role of the State is decisive. “We believe the Government must lead with technical criteria and act decisively. If action is not taken now, the benefits of the energy transition will simply be delayed,” Mitma concluded.