Then you could simply attach your 1hp engine to some simple mechanical device (e.g., an elevated water tank) that will deliver any amount of horsepower after ha

Then you could simply attach your 1hp engine to some simple mechanical device (e.g., an elevated water tank) that will deliver any amount of horsepower after having been "charged" by your engine for some time, and call that "peak power". I.e., the peak power measure doesn't make sense: the only number that counts is the average, sustained output.