Peru is awaiting the finalization of the new regulations for distributed generation, which were published in 2024. Fidel Antonio Rocha Miranda, a partner at the law firm Santivañez Abogados, warned that this regulatory framework could hinder the development of new projects if key aspects such as the power limit and tariff treatment are not addressed. "These regulations will not solve the sector's problems and, in some cases, introduce more uncertainty than already exists ," Rocha Miranda emphasized in an interview with Energía Estratégica. One of the most critical points is the 200 kW power limit established in the draft, as this threshold excludes industry and any energy-intensive user, restricting development to small residential systems.
Furthermore, the draft does not establish clear rules on tariffs for surplus energy , nor does it obligate distributors to purchase it in full. "The only way to mitigate the financial risk of these projects is to guarantee that all production will be purchased by the distributor at a known price," the interviewee stated.
Therefore, uncertainty in these two elements—price and quantity—hinders any financial evaluation and, consequently, the possibility of investment. Added to this is a new regulatory obstacle: the practical elimination of bilateral contracts .
With Law 32.249, passed in 2024, and its corresponding draft regulations, the possibility of signing long-term contracts between distributed generators and distribution companies is restricted . "Agreements were the only tool that allowed the development of distributed generation until now," Rocha Miranda emphasized. "It is argued that bilateral contracts do not meet the needs of end customers, but that is completely false."
In fact, they have helped keep generation prices below those of tenders, which has prevented increases in final rates,” he emphasized regarding the limitation that, in his view, goes against the real functioning of the market and the interests of users. Furthermore, the Peruvian electricity system has serious limitations in its transmission and distribution networks , particularly in regions like Piura , where distributed generation has alleviated structural capacity problems.
However, the lawyer points out that state ownership of 11 of the 14 national distribution companies is delaying the necessary investments to expand or reinforce the network. "Investment plans in distribution and sub-transmission are driven by the state, and state-owned companies face stricter regulations and much slower implementation times than private ones," Rocha Miranda noted.
Furthermore, he stated that negotiating with these companies is more complex, given that officials are less likely to sign private agreements for fear of administrative or legal consequences. This institutional framework directly affects the viability of distributed generation. "Regulatory incentives are insufficient: a change in the market's institutional model is also needed," argued the partner at Santiváñez Abogados .
He emphasized the need for companies capable of executing projects quickly. Despite this challenging outlook, Rocha Miranda indicated that if the regulations are amended and the necessary changes are introduced, there is potential for growth, given the high level of interest from private sector players in developing distributed generation: "If regulatory incentives are aligned, risks could be mitigated and new projects made viable." However, the regulatory project has remained stalled since its publication in 2024 , and there are no clear indications that the Ministry of Energy and Mines plans to move forward with its approval soon .
Even so, the sector continues to insist and has already made the authorities aware, with concrete data, of the negative impact of eliminating the bilateral model.
And those in the sector are confident that the course can be corrected. Finally, Rocha Miranda concluded with a strategic vision: Distributed electricity generation is not viable.
All the benefits are proven: lower transmission investments, higher quality and security of supply, and operational flexibility for distributors.
From their perspective, the challenge lies in transforming that vision into concrete, coherent, and functional regulations.