The Ministry of Energy and Mines ( MINEM) has drafted a supreme decree to regulate electricity supply tenders under Law No. 32249 , regulations the sector is awaiting to define its upcoming investments. The Presidency of the Council of Ministers (PCM) published its Ex Ante Regulatory Impact Analysis file, which has received a favorable evaluation from the Multisectoral Commission for Regulatory Quality. This step represents the process prior to its approval as a supreme decree.
The proposal envisions long-term contracts of ten to fifteen years , separate purchases of energy and power, and contracting by time blocks. The dispute revolves around two objectives: obtaining better prices through competition between existing and new generation, or establishing specific conditions for projects under construction to secure financing.
During the Future Energy Summit (FES) Peru 2026 , EDF Peru and Huawei demanded conditions to incorporate new developments, while Kallpa Generación defended competition between existing and new infrastructure to reduce the cost to the regulated user.
For the National Interconnected Electricity System, the project sets a maximum of 65% of each distributor's total demand to be contracted through long-term tenders , with periods of three to six years between the signing of the contract and the start of supply. This limit establishes a ceiling per modality, without imposing a minimum purchase coverage.
“Long-term tenders need to be reserved for new projects only,” stated Guillermo Grande, CEO of EDF Peru, during his participation in FES. The executive questioned the participation of existing and depreciated power plants because he believes these processes should facilitate the entry of new players and capacity.
“The long-term regulations are precisely so that we can have market mechanisms where new players and new projects can enter the market,” he explained. In his view, short- and medium-term calls for proposals should be the competitive space for operational infrastructure.
From Kallpa, their representative Irwin rejected the idea of exclusively favoring new developments. “We have to let there be competition, let existing energy compete with new energy and price; the resulting better price will benefit the regulated user,” he stated.
Financing explains part of the difference. César Butrón, president of the Board of Directors of the Economic Operation Committee of the System (COES) , pointed out that a large part of the projects depend on financing backed by their future income and that banks require long-term contracts.
“They are not achieving financial closure. That is the big problem; there are not enough long-term contracts,” he warned during FES Peru.
Gabriel Valencia, Huawei's commercial manager , emphasized the importance of participation conditions. "The auction design is even more important than the auction itself," he stated. He also called for clear rules to differentiate between existing power plants and new projects, so that the bidding processes offer opportunities to those seeking to enter the market.
The project proposes approving the Electricity Procurement Regulations for the Supply of Regulated Users , with seven titles, 38 articles, six final supplementary provisions, and five transitional provisions. When it enters into force, it would repeal the previous regulations, approved by Supreme Decree No. 052-2007-EM .
Its purpose is to ensure timely and efficient supply, promote competition, and encourage investment in power plants. Law No. 32249 provides the framework for this adaptation; the next step is the publication of the regulatory file with a favorable evaluation, prior to the approval of the decree.
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Each distributor must submit a mandatory ten-year Bidding Program annually to MINEM and Osinergmin. This document will identify procurement needs, products, time slots, bidding dates, and supply periods.
The schedule must be based on monthly demand projections and current contracts for a fifteen-year horizon. Its submission deadline is the last business day of November, and any modifications will require evaluation and approval by Osinergmin.
In addition to the long term, the text contemplates a maximum of 40% of demand for the medium term , with contracts of four to five years and grace periods of two to three years. For the short term , it sets a limit of 35% , with supplies lasting from one month to three years and grace periods of one to two years. The grace period is the time between the signing of the contract and the start of supply.
Article 15 distinguishes three products: power only, energy only, and power with associated energy . Products that include power are restricted to the peak block; joint contracts for power and energy can only be tendered in the interconnected system.
Purchasing energy in blocks allows for structuring offers for specific supply periods. The terms and conditions must include additional guarantees when commitments are backed by projects that are not yet commercially operational.
Prices and due dates: the conditions that will define competition
Osinergmin will approve the terms and establish the maximum prices per block. The award process will use a mandatory mathematical model to minimize the total updated cost of energy and power over the contract, ensuring the required firm power.
For hydroelectric projects, the text includes a discount factor in the economic evaluation, approved by ministerial resolution at the proposal of Osinergmin. Its application does not modify the price offered to the winning bidder.
Long-term advance tenders may entail an additional charge of up to 3% on energy prices for regulated users . The amount will depend on how far in advance the process is initiated, will require approval from Osinergmin, and will not be included in the price of the contract with the generator.
Contracts awarded without a competitive bidding process will be exceptionally permitted to cover up to 100% of the unawarded demand when it is justified that holding another bidding process is not feasible. These contracts will have a maximum validity of one year, without extension, and their prices may not exceed the regulated bar prices.
The project also incorporates a monthly mechanism for reallocating surplus energy or power among distributors. This will allow for addressing temporary deficits until they can be covered through contracts, preserving payment guarantees for generators.
For legacy contracts covered by Law No. 32249 , extensions and increases in the committed quantities are expressly prohibited. Their expiration dates will determine how much supply will be available for new awards.
Butrón pointed out at FES Perú that the distributors have existing agreements that expire in 2030 and 2031. Therefore, the approval of the regulations would not imply immediate calls for bids from all companies: the programs and terms must specify the volumes and conditions under which existing power plants and projects under construction will compete.