PERÚ - Observatory for Renewable Energy in Latin America and

Perú- Products I and II
1.4 Legal and Institutional Framework of Renewable Energies
In this section it is presented the legal framework of electricity activities, barriers
that had to be faced up for the hydroelectric development, measures to promote
the investment in a new generation supply, general tariff regime, characteristics of
the electricity market, legal framework of renewable energies, tax incentives and
the results of the application of the legal framework.
1.4.1 General Legal Framework of Electricity Activity
The General Regulatory Framework for the tariff / remunerative regimen is
established by L.D. Nº 25844 “Electrical Concessions Law” - ECL (enacted on
November of 1992), the Law Nº 28832 “Law to ensure the Efficient Development
of the Electricity Generation” (enacted on July of 2006) and its bylaws.
1.4.1.1 Barriers for the Development of Hydroelectric Power Stations
In Peru, an important part of the installed capacity through Hydroelectric Power
Stations in the SEIN was built by the State, most of which have been privatized
from the decade of 90. Since then, only three Hydroelectric Power Stations were
built by initiative of private investors. These are the Hydroelectric Power Stations
“Yanango” of 42.6MW and “Chimay” of 150,9 MW which entered into
commercial transaction in 2000, as well as the Hydroelectric Power Station “El
Planatanal” of 220 MW, which entered into commercial transaction in December
of 2010 33 . The main barriers for the development of hydroelectric projects
compared with other technologies like thermal plants of natural gas are:
a) Amounts of Investment
Hydroelectric Power Stations are characterized by having low production costs
(stage of operation), but very high investment costs compared with other types of
technologies. For instance, for each MW of installed capacity, it is required an
investment between 1.2 and 1.8 million US$, and for a natural gas thermal power
station with simple cycle, it is required an investment of 0.5 million US$'s.
b) Periods of Construction
The large-sized Hydroelectric Power Stations have construction periods of an
average of 4 to 5 years, while natural gas thermal power stations are built in a
year or a year and a half, approximately.
Larger periods imply higher financial expenses during the construction stage of a
Hydroelectric Power Station, which would have income over the sixth year while
a thermal power station would have them before the second year.
3 
In the case of the “El Platanal” H.P.S, its construction started on March of 2006, however the
final concession for this project was given on July of 2001. The iniciative of the prívate investor
was manifested in 1996, giving temporal concession on November of 1996, which shows that
since the first prívate iniciative til the execution of works it passed over 10 years, and adding the
4 years of construction, make a total of 14 years for the commercial transaction of the project.
One of the main difficulties that this project had was the financing.
40