The regulatory changes implemented by the Economic Operation Committee of the System (COES) for the evaluation of the Primary Frequency Reserve (RPF) have marked a turning point. Starting in November of this year , penalties for non-compliance with frequency regulations will no longer be fixed, tolerable amounts but will instead be indexed to the Short-Term Marginal Cost (CMg) of energy during the hour of the event.
“This penalty, which generators historically considered a minor operating cost, now becomes a financial risk in the annual cash flow. Indexing non-compliance to the marginal cost means that failing during a contingency in peak hours will cost much more; that is, we will see increases in penalties between 30% and 133%,” says Nicol Pomalia , CEO of Capo Energy , a leading company in the engineering development and implementation of BESS projects in Peru.
The Technical Challenge: Mechanical Governors vs. Power Electronics
Traditional combined-cycle and hydroelectric power plants rely on speed governors (mechanical-hydraulic systems) that suffer from thermal fatigue and delays when faced with very narrow deadband requirements (typically ±0.03 Hz to ±0.05 Hz). In contrast, a BESS system equipped with power electronics and closed-loop (Pf) control algorithms responds in less than 100 milliseconds . Operating at high discharge rates (1C or 0.5C), a BESS injects 100% of its active power almost instantaneously. This not only mitigates penalties but also positions the plant as a recipient of the economic benefits associated with the Penalty and Incentive Exchange .
The Next Level: Secondary Regulation (RSF)
In addition to the clear compliance with Frequency Regulation by the BESS, an additional multiplier for the return on investment of battery projects lies in Secondary Frequency Regulation (SFR) . Operationally, SFR responds to the commands of the COES Automatic Generation Control (AGC) to restore the nominal frequency to 60 Hz and release the primary reserve, a process that takes minutes.
"For a thermal power plant, operating in RSF mode means keeping turbines running at inefficient partial loads, penalizing their heat rate and subjecting the blades to continuous cyclical oscillations," explains Pomalia. "By integrating a BESS system into the COES AGC, we eliminate these thermomechanical limitations. Its ramp capacity follows the COES signal correctly."
The deployment of energy storage is a direct response to the country's systemic need. As has been pointed out in various forums within the sector, the Peruvian electrical subsystem faces a dual challenge: "the imminent congestion caused by the curtailment of solar energy in the south, and the dangerous loss of system inertia due to the integration of non-conventional renewable energy generation plants."
To address this challenge, Pomalia warns that as the requirements of the Pre-Operational Studies (EPO) become more stringent around 2027-2028 , simple grid-following inverters will become obsolete. Regulations will require grid-forming inverters , capable of providing synthetic inertia and maintaining grid voltage and frequency on their own during severe faults.
Looking ahead, the Capo Energy executive raises a debate that the market must begin today. While current regulations focus on generation, the true systemic potential of storage lies in transmission.
"It is time for the COES Transmission Plan to evaluate BESS systems as Non-Conventional Alternatives. Projecting the challenges of the SEIN from 2030 onwards, the State should consider systematic storage supplies at critical nodes to alleviate structural congestion. These large strategic battery banks should be tendered by PROINVERSIÓN, guaranteeing system reliability at a fraction of the cost and time of a high-capacity transmission line."
In short, the new regulatory signals and the operational stress of the National Interconnected System (SEIN) have created an ideal scenario. BESS systems in Peru have ceased to be a technical complement and have become the most strategic financial and infrastructural asset of the energy transition. And in this context, Capo Energy is consolidating its position as the integrator setting the standard for the engineering of the future.
Capo Energy seeks to consolidate its leadership in storage
Alongside market development, Capo Energy is advancing a strategy focused on transmission, substations, and energy storage. The company projects a pipeline of 50 MWh between 2026 and 2027 , supported by already completed projects of 7 MWh and 10 MWh.
The company works with both large-scale customers and power generators. In the former segment, it develops turnkey EPC projects, including the supply of energy storage systems. In the latter, it primarily participates in the integration and construction of infrastructure associated with equipment purchased directly by the power companies themselves.
“Additionally, the window of opportunity we have also seen is the interest from the higher-consumption industries,” Pomalia stated.
According to the report, companies with energy demands exceeding 5 MW already have profiles suitable for analyzing storage projects. In many cases, maintenance and project departments are driving detailed engineering studies to assess the economic impact of these technologies on their operations.
The executive states that projects developed for free clients currently show return on investment periods of between three and four years, depending on factors such as location, weather conditions and logistical complexity of each installation.
"We currently lead the Peruvian market in BESS storage systems," the executive stated.
According to recent market surveys, Capo Energy is developing a portfolio of approximately 7 MW and 7 MWh through peak shaving solutions and BESS-as-a-Service schemes , a segment that is gaining prominence among mining companies, smelters, and large electricity consumers seeking to optimize their energy costs.
For Pomalia, the main change is that energy storage is beginning to move beyond its purely technical role and become a business tool within the Peruvian electricity subsystem. And in this process, COES regulation appears as one of the factors that could accelerate battery adoption in the coming years.
The current context supports this expectation. Several developers are already analyzing storage projects associated with solar and wind power plants, while industry projections anticipate that Peru could exceed 700 MW of storage by 2030 , driven by renewable energy expansion, the need for flexibility, and the evolution of ancillary services.
For Pomalia, the opportunity is clear: batteries are beginning to play an increasingly strategic role within the Peruvian electrical subsystem. And while until a few years ago the main argument for installing them was technical, today the discussion is starting to revolve around profitability and reliability.