The Puerto Rico Energy Bureau has approved a contract for a 100 MW battery energy storage project proposed by Yabucoa Energy LLC in the municipality of Yabucoa, in the island’s southeast, subject to several modifications.
The four-hour battery energy storage system (BESS), with a capacity of 400 MWh, will be developed, operated, and maintained by Yabucoa Energy under a 20-year energy storage services agreement with the Puerto Rico Electric Power Authority (PREPA).
The project will be built on the site of the former Shell refinery in Yabucoa. During its review, the regulator identified conflicting references to the project location in different sections of the draft contract and ordered PREPA and Yabucoa Energy to correct the site description and remove references to other facilities or locations.
The bureau also ordered the removal of contract clauses that would have allowed the system’s available energy capacity to decline over time due to battery degradation. It said the selected proposal committed to maintaining the contracted energy capacity throughout the agreement.
As a result, Yabucoa Energy must maintain the full 400 MWh discharge capacity for the duration of the 20-year contract by replacing or expanding system components as necessary. The regulator said introducing a degradation profile after contract award would alter a key element of the proposal evaluated during the procurement process.
The contract price remains confidential. However, the regulator said it falls within the range of previously approved battery storage projects in Puerto Rico and is lower than that approved for most of those installations.
The agreement assumes interconnection infrastructure costs of up to $20 million. If final costs are lower, contract payments must be reduced by the difference. If they exceed that threshold, the developer may terminate the contract without further obligations.
Final interconnection studies have not yet been submitted. PREPA and Yabucoa Energy must provide them once completed to demonstrate that the BESS can connect to the grid without causing voltage problems or affecting system stability and reliability. Any mitigation measures or network upgrades identified through those studies cannot be funded by electricity consumers.
The project initially faced questions over site control. In June, PREPA and the developer informed the regulator that Yabucoa Energy had accepted the Puerto Rico Land Administration’s terms for the long-term lease of a roughly 49-hectare site. Following that submission, the bureau allowed contract negotiations to proceed.
Yabucoa Energy submitted the project through Puerto Rico’s expedited process designed to help new renewable energy and storage projects qualify for federal investment tax credits. The parties have 10 days from notification of the ruling to incorporate the required changes and submit the revised contract.
The project is separate from Go Green USA’s 80 MW/320 MWh Yabucoa Energy Park, also approved in 2026, and from the projects awarded to Yabucoa BESS LLC, reported in January, which form part of two battery storage projects with a combined capacity of 400 MWh.
From pv magazine LatAm
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