en.Wedoany.com Reported - Brazil's Ministry of Mines and Energy will hold the country's first battery energy storage system (BESS) auctions on December 2 and 4, with market expectations that the contracted available capacity could rise from the initial estimate of 2 GW to up to 6 GW. This move marks a new chapter for the power sector, as the industry anticipates that this technology will play a strategic role in the operation of the National Interconnected System (Sistema Interligado Nacional, SIN), enhancing grid flexibility and security amid the rapid growth of renewable energy.
Previously, the Ministry of Mines and Energy stated that these auctions would contract at least 2 GW of capacity. The second Capacity Reserve Auction (LRCAP) held in March this year actually contracted 19.5 GW, below the market's previous expectation of 20 to 25 GW. According to Débora Yanasse, a partner at Tauil & Chequer Advogados (in association with Mayer Brown), the remaining capacity could be filled by energy storage systems, bringing the theoretical contracted available capacity of the BESS auctions to 6 GW, thereby enhancing market attractiveness.
Despite the significant contracting potential, the auction structure has raised concerns among participants. The government has divided the tender into two sessions: one exclusively for projects using localized content, and the other open to all systems. The market is worried about demand allocation issues, as localized content projects are considered more costly and less competitive in price reductions, potentially leading to a greater impact on consumers. Yanasse noted that policies supporting the domestic industry are reasonable, but their costs to consumers must be weighed against the social benefits of industrialization.
The timing of grid connection has also drawn attention. A technical note detailing the remaining capacity at connection points of the National Interconnected System, jointly published by the National Electric System Operator (Operador Nacional do Sistema Elétrico, ONS) and the Energy Research Company (Empresa de Pesquisa Energética, EPE), is scheduled for release on September 30. However, the technical registration deadline for projects is July 31, creating a gap of approximately two months. This timeline is designed to align with the first access window of the National Transmission System Access Policy (Política Nacional de Acesso ao Sistema de Transmissão, PNAST). Yanasse warned that the time lag between project registration and the publication of available capacity could affect bidding competitiveness and deter investment. She emphasized that connection points are a core element of project development, and a lack of predictability could increase risks. The industry advocates for publishing transmission capacity before connection points are determined, or allowing changes to initially selected connection points after the technical note is released.
Although Law No. 15.269/2025 has established a regulatory foundation for energy storage, and Brazil's National Electric Energy Agency has approved rules for standalone and hybrid battery projects, significant questions remain regarding cost allocation. One key focus is the ERCAP charge, a fee used to fund the contracting of energy storage systems. Preliminary signals suggest this charge may be borne by generators, but a final decision has not yet been formally confirmed. Yanasse assessed that regulatory uncertainty could leave room for future challenges and disputes. She also noted that recent regulations have eliminated double charging for battery systems dispatched by the ONS, which is a major step forward for project economic viability.
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