There is still uncertainty surrounding Brazil’s battery capacity auction in December, despite strong investor interest which resulted in a record of registered projects.
The director general of Brazilian electricity regulator Aneel, Sandoval Feitosa, this week stood against a change in the cost of auction contracts, defended by associations representing renewable generators and storage companies.
Draft changes Brazilian law defining the cost of the capacity reserve auction have been put forward by federal deputy Arnaldo Jardim. The PL 3,716 legislative bill would see battery storage prorated exclusively among power generators. Previous energy reserve auctions for other technologies had the costs prorated for everyone in the sector.
Following the Brasilia Summit Lide event, Feitosa said amending Law 15,269 – Brazil’s new legislation reforming the electric power sector – as it begins to take effect, could reinforce instability in the sector.
The Brazilian Energy Storage Solutions Association (ABSAE), however, said that PL 3.716/2026 only reestablished equality under the law, “treating batteries on equal terms with other power resources, such as coal and gas plants.”
“Mistakes must be corrected quickly. This unequal rule for the payment of batteries was inserted only in the final report of MP 1304, without written justification, without formal amendment and approved in record time. It is the prerogative of Congress to review its own acts. Aneel acknowledged that this is the main risk point for the first battery auction, in Technical Note and board debate. Brazil needs BESS operating in 2028 to ensure the security of energy supply, therefore, ensuring the success of the contract is essential and urgent.”
There are other key issues still to be decided. Even the record offer of more than 260 GW of projects in the auction for BESS with national equipment, and 280 GW for the second auction, is yet to be confirmed, since no environmental licensing and certifications are required during the registration stage. The license will be released only in November.
Questions remain over remuneration for BESS projects outside of offering availability, with Atlas Renewable advocating for payments for avoided cuts to generation. A public hearing on auction notices is open until September 14.
Final demand for projects will remain unknown until the auction. Market projections range from 1 GW to 5 GW. During the Greener Summit 2026, the PSR Head of Market Planning and Intelligence, Mateus Cavalieri, said the company estimates 1 GW to 2 GW of demand for the auctions, as needed by the system. He acknowledged that the government may decide to hire a slightly larger volume as a form of security, predicting delays in the delivery of bills from other reserve auctions.
ABSAE expects to contract between 4 GW and 5 GW, based on power demand signals and revisions of the LRCAP result for thermals and hydroelectric dams of March. This volume would attract investments between BRL 16 billion ($3.12 billion) and BRL 20 billion.
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