en.Wedoany.com Reported - ISA Energia Brasil (ISA Energia) is studying participation in the battery capacity reserve auction (LRCap de baterias) to be held in December this year, as the company already operates a 30 MW energy storage system in São Paulo state.

The first round of the auction will only accept projects using localized content, which are more costly but can stimulate Brazil's domestic industry. The second round accepts equipment and services from any source. The total contracted capacity will be announced during the auction process.

Dayron Urrego, Project Execution Director of ISA Energia Brasil, stated that the first round may be more attractive due to more concentrated opportunities. "It seems like a bigger opportunity. Since the final auction capacity is unknown, all capacity might be concentrated in the first round, with little or none in the second." He added that the company needs to study both auction rounds.

Urrego also commented on the battery contract model, which adopts a fixed revenue linked to availability and does not allow other services such as price arbitrage. "Arbitrage can be a source of revenue, but it also brings risks. In my view, transmission companies generally consider this (availability) model better because it eliminates arbitrage risk."

The ISA Energia director made these remarks to reporters on Thursday (July 2) during the energization ceremony of the Piraquê transmission project between Minas Gerais and Espírito Santo states.

Mariana Espécie, Secretary of Energy Transition and Planning at the Ministry of Mines and Energy (MME), stated at the event that she believes the auction will still be held in December despite elections in October, though the contracting phase may extend to 2027. "The entire verification process relies on other participants, such as the National Electric Energy Agency (Aneel) and the Electric Sector Monitoring Committee. I believe everything is progressing as expected so we can develop."

Urrego believes that ISA Energia's battery experience at the Registro substation in São Paulo state gives the company a competitive advantage in the auction. "We already know how to implement it, and we can do it quickly. The company completed the Registro project within one year of Aneel's approval. We know how to operate, while other companies do not know how to operate this type of asset."

He also highlighted experience with capacity augmentation technology, which can restore initial capacity when batteries naturally degrade after use. "This is undoubtedly important knowledge." Urrego said that companies unfamiliar with energy storage projects may misprice, underestimating actual operating costs or overpricing, harming auction competitiveness. "I believe we are in a leading position thanks to our knowledge. Companies that don't understand may exaggerate or underestimate, but this ultimately becomes almost a commodity. Our main knowledge right now is knowing how to implement and operate. Operating the system is very important."