Puerto Rico’s regulator is forcing stalled BESS projects forward. Here’s what that means for clean grids, storage investors, and green technology strategy.
Puerto Rico’s regulators just sent a very clear message: battery storage is no longer optional infrastructure, it’s core grid equipment.
The Puerto Rico Energy Bureau (PREB) has ordered the Puerto Rico Electric Power Authority (PREPA) to complete its long-delayed Accelerated Battery Energy Storage Addition Programme (ASAP). Behind the regulatory language is a story that matters to every utility, developer, and investor working in green technology: how fast can we actually build the storage needed to back up clean energy, and what happens when projects stall?
This matters because Puerto Rico is a preview of what many grids will face over the next five years: rising renewables, aging infrastructure, climate-driven extreme weather, and political pressure to keep the lights on. Battery energy storage systems (BESS) sit right at the intersection of all three.
In this post, I’ll break down what’s happening in Puerto Rico, why PREB’s latest order is a big deal for clean energy, and what lessons other markets can steal—especially if you’re planning or financing grid-scale storage.
What Puerto Rico’s ASAP Programme Is Actually Trying To Do
ASAP is a simple idea with messy execution: add utility-scale battery storage to existing power plants as fast as possible to stabilise the grid.
Here’s how the scheme works in plain terms:
- PREPA already has power purchase and operating agreements (PPOAs) with several independent power producers (IPPs).
- Under ASAP, those IPPs retrofit their existing generation sites with battery energy storage systems (BESS).
- Luma Energy, the private operator running Puerto Rico’s transmission and distribution system, coordinates grid integration.
- PREB oversees the whole thing and checks that projects align with Puerto Rico’s Integrated Resource Plan (IRP) and energy public policy.
The target in the IRP is about 1,500MW of battery storage, originally framed as a planning guideline. PREB has now made it explicit: that number is not a hard cap. If more storage is justified and can be delivered, the door’s open.
Here’s the thing about that clarification: when a regulator says a capacity figure is guidance, not a ceiling, it’s effectively signalling to developers and financiers, “Bring credible projects—we’ll look at them.” That alone can unstick hesitant capital.
ASAP isn’t just a technology project. It’s a resilience project:
- Puerto Rico faces recurring outages and generation shortfalls.
- Hurricanes have repeatedly exposed how brittle its grid is.
- Batteries near generation help smooth supply, support frequency, and provide backup when transmission is constrained or damaged.
If you work in green technology, this is the kind of programme you want to watch closely: it shows how storage, policy, and private operators collide in the real world.
Why the Programme Stalled—and Why PREB Finally Stepped In
PREB’s latest order didn’t appear out of nowhere. ASAP has been dragging for more than a year, and the regulator has clearly lost patience.
The original plan
- In 2024, PREB confirmed that Luma’s plan to contract BESS from IPPs was consistent with Puerto Rico’s energy policy.
- By April 2024, Luma had identified Phase 1 projects that could start right away with minimal grid upgrades.
- Some developers claimed they could be operational in under 12 months.
- Contracts were expected to be executed by April 2025.
If that had happened, Puerto Rico would likely already have a meaningful chunk of new storage online in late 2025.
What actually happened
By August 2025, progress had mostly stalled:
- Only one developer, Ecoeléctrica, responded to PREPA to say it was working to complete documentation.
- Three others—San Fermín, Horizon, and Oriana—didn’t respond at all.
- PREB described the delays as “extremely concerning” and ordered all four developers to explain themselves.
- The Bureau stressed these projects are critical for addressing the island’s generation shortfall and even raised the prospect of fines for non-compliance.
From a green technology perspective, this is a classic bottleneck: technology is ready, economics are increasingly attractive, but contracts, risk allocation, and governance drag the whole thing out.
Developers often hesitate when:
- Contract terms push too much risk (for example, fuel cost pass-throughs or grid-availability risk) onto a single party.
- There’s uncertainty about approvals from entities like the Financial Oversight and Management Board (FOMB).
- Timelines for review, interconnection, and permitting are unclear or repeatedly slip.
PREB’s response was to stop nudging and start ordering.
PREB has now required PREPA to complete the review with the FOMB and move the four ASAP agreements forward, with clear instructions and oversight.
That’s a strong signal: if you sign up to deliver essential battery storage in a constrained system, you’re expected to act like a critical infrastructure partner, not a speculative developer.
The New Resolution: More Storage, More Oversight, Less Excuse
PREB’s recent resolution and order does three important things for Puerto Rico’s BESS future.
1. It validates Luma’s final agreements
PREB concluded that Luma’s four final agreement terms under ASAP are aligned with:
- Puerto Rico’s Energy Public Policy, and
- The Integrated Resource Plan (IRP).
The Bureau approved the draft contracts and instructed Luma to:
- Finalise them,
- Submit them to PREPA’s Governing Board for approval, and
- Demonstrate that this process has been completed.
This reduces contract uncertainty for developers: the regulator has already signed off on the basic structure.
2. It forces PREPA to clear the FOMB hurdle
PREPA has been formally ordered to obtain approval from the Financial Oversight and Management Board.
If you’re on the finance side, this matters. FOMB oversight is often seen as a risk factor in Puerto Rico because it can delay or reshape deals. PREB effectively says: you don’t get to use FOMB as a permanent excuse; go get the sign-off.
3. It redefines the 1,500MW ‘limit’ as a floor, not a ceiling
PREB has clarified that the ~1,500MW of storage in the IRP is a guideline, not a fixed limit. That means:
- Storage projects will be evaluated even if total capacity exceeds 1,500MW.
- Any final decision on how much storage is appropriate rests solely with PREB.
For the broader green technology story, this is huge. It formalises what many of us already believe: in a high-renewables grid, rigid caps on storage don’t make sense. You size storage to:
- Support reliability targets,
- Manage peak demand,
- Integrate variable solar and wind, and
- Provide resilience during extreme events.
You don’t size it to hit a round number in a five-year-old plan.
Policy Tensions: Pass-Through Costs and Investor Confidence
Not everyone at PREB was fully on board with the contract structure, and that nuance matters if you’re modelling projects.
Commissioner Mateo Santos dissented in part and concurred in part. His main issue? The pass-through concepts in the ASAP contracts.
He essentially said:
He doesn’t agree with the pass-through provisions in the contracts, but he supports the overall determination on integrating battery energy storage and the clarification that 1,500MW is just a guideline.
From an investor or developer lens, this is a familiar tension:
- Pass-throughs can make projects bankable (for example, passing through certain grid or regulatory costs), but
- Poorly designed pass-throughs can make regulators nervous about long-term affordability for ratepayers.
Here’s where I land on this: if regulators want rapid storage deployment, they must allow risk-sharing structures that make projects financeable. But they’re also right to flag designs that could lock consumers into opaque or open-ended charges.
The better approach is transparent, data-driven pass-through design:
- Clear caps or bands on certain cost components,
- Transparent formulas instead of discretionary charges,
- Performance-based elements that reward availability and grid support.
Done well, those mechanisms actually align investor returns with grid reliability and clean energy goals.
Lessons for Other Grids Rushing Into Storage
Puerto Rico’s accelerated BESS programme isn’t just a local story. It’s a case study for any region trying to scale green technology quickly—especially where the grid is fragile or politics are loud.
Here are practical lessons other markets can borrow.
1. Treat battery storage like critical infrastructure, not a pilot
PREB’s language and enforcement posture make it clear: BESS is not a side project. It’s part of the core system.
If you’re a policymaker or utility:
- Set mandatory timelines for key milestones.
- Tie contractual obligations to regulatory expectations and potential penalties.
- Embed storage into the Integrated Resource Plan, not just as an add-on.
2. Don’t freeze your system around outdated capacity numbers
The clarification that 1,500MW is guidance, not a hard ceiling, is worth copying elsewhere.
As renewable penetration climbs and EV adoption ramps, the right level of storage in 2025 won’t match the right level in 2030. Hard caps age badly. Better:
- Use ranges and scenarios in planning,
- Review storage needs periodically as data improves,
- Keep explicit flexibility in regulation so projects don’t stall over arbitrary limits.
3. Align contracts, regulators, and financiers early
ASAP shows what happens when contract content, developer expectations, and regulatory timelines aren’t fully aligned.
If you’re structuring a storage programme:
- Get regulatory comfort on the contract template before shopping it widely.
- Pre-agree how pass-throughs, curtailment, and grid-availability risk are handled.
- Involve finance voices (banks, infrastructure funds) early so projects don’t die in credit committee.
One interesting example in Puerto Rico is Polaris Renewable Energy, which submitted a BESS standard offer (SO1) under ASAP. The move effectively said to the regulator and market: we’re ready to deliver under a clear, standardised structure. In markets full of hesitation, that kind of positioning stands out.
4. Connect storage directly to resilience and public trust
Puerto Rico’s grid has become a symbol of what happens when infrastructure under-investment meets climate risk. Every new outage erodes trust.
Battery storage isn’t just about arbitrage or smoothing solar output. In a climate-exposed system, it’s:
- Fast-start backup when a line trips.
- A tool to black-start parts of the grid after major events.
- A way to keep critical loads—hospitals, water systems, telecoms—online during storms.
For any green technology strategy, explicitly linking storage deployment to measurable resilience gains makes public support and regulatory backing much stronger.
Where This Fits in the Bigger Green Technology Picture
Within our broader Green Technology series, Puerto Rico’s BESS story is a reminder that technology isn’t the bottleneck anymore—coordination is. Lithium-ion storage is mature. Control systems are smart. AI-driven optimisation already helps batteries provide multiple services at once.
What holds projects back are:
- Unclear roles between public and private entities,
- Slow or fragmented approvals,
- Contract structures that don’t balance risk.
The good news is that PREB’s latest order shows a path forward:
- Be explicit about targets but flexible about ceilings.
- Use regulatory authority to force stalled projects across the line.
- Keep resilience and public policy at the centre of the conversation.
If your organisation is planning utility-scale storage, hybrid solar-plus-storage, or microgrids, Puerto Rico isn’t just a headline—it’s a playbook. The question isn’t whether storage will be core grid infrastructure; it already is. The real question is how fast you’re willing to move, and whether your contracts, regulators, and capital stack are aligned with that urgency.
Now’s the right time to review your own pipeline: which projects look like Puerto Rico’s Phase 1—“ready” on paper but stuck in practice—and what would be your version of PREB’s push that finally gets them built?