The tariff pressures stem from elevated fuel costs driving up generation expenses, compounded by transmission and distribution cost escalation. The ministry is simultaneously working to reduce diesel-fired generation reliance while the new rate architecture takes shape. Santillán emphasized the differential treatment aims to protect economically vulnerable consumers from bearing proportional cost burdens during price adjustment cycles.
On the supply side, Peru has 33 generation projects in intermediate development stages: 11 solar, five wind, one thermal and 16 hydroelectric facilities. The Intipampa Solar Expansion entered commercial operation this year as the sole 2026 commissioning. Solar projects Illa, Sunny 3 and Hanaqpampa are advancing alongside wind developments Guarango, Caravelí and Muyu, plus the Paita Industrial thermal plant. Sunny and Caravelí are confirmed for construction phase entry next year, though commercial operation awaits regulatory clearances through the National Interconnected System Economic Operation Committee.
A contracting regulation enabling private sector participation in solar block auctions will be published within two months, addressing the pipeline of wind and solar investment awaiting regulatory reform. Transmission bottlenecks have delayed subtransmission projects, with the ministry establishing working tables to resolve contractor performance issues and permitting delays including internal ministry approvals. Critical transmission lines from Huánuco through Tocache, Celendín to Piura face congestion problems in the north, prompting coordination with the Environment and Agriculture ministries to accelerate approvals once projects reach authorization stages.
This article was curated and published as part of our South American energy market coverage.
