The energy matrix of Peru has been mainly supported by two sources: hydroelectric plants, responsible for almost half of the electricity, and natural gas thermoelectric plants, which contribute about 40%. However, a new report from the Ministry of Energy and Mines has revealed that proven natural gas reserves have decreased by 9.5% in 2024, ensuring only 13 years of supply at the current rate of consumption.
Challenges in Peru’s Energy Transition
This decline in reserves poses a serious challenge to the country’s energy security, as many plants could run out of fuel in just over a decade, affecting supply stability and electricity costs. In response, Law 32249 has been introduced, designed to diversify the energy matrix and encourage the use of renewable energies such as solar and wind.
However, the implementation of this legislation faces delays, as many of its regulations remain in draft or unpublished, limiting the effective entry of new technologies.
Meanwhile, natural gas plants, favored by low prices and environmental exemptions, continue to have an advantage over renewable sources, which distorts competition in the energy market.
In terms of electricity demand, peaks now coincide with hours of highest solar radiation, making solar energy not only an economical option but an effective solution to meet needs during peak consumption hours.
However, non-conventional renewable energies barely represent 10% of electricity generation in Peru, compared to 38% in Chile. This low percentage suggests great growth potential, as long as clear policies are implemented and complementary services are developed to stabilize the grid.
The World Energy Council ranks Peru 41st in its Energy Trilemma index, highlighting the need to accelerate diversification to avoid dependence on hydroelectric plants, especially in the face of extreme droughts.
The lack of regulations affects investments in renewables, with 58 solar and wind energy projects stalled, equivalent to 12.5 gigawatts of power and more than 12,000 million dollars in potential investments.
An electricity market is required that allows fair competition among all renewable technologies through fair auctions and tenders, as well as a market for complementary services to efficiently manage energy generation and storage.
Ultimately, Peru’s energy future depends on key political and regulatory decisions to avoid dependence on imported fossil fuels and achieve a decarbonized economy, thus fulfilling international commitments.
