YOU.ON said it expects to supply around 1 GW of battery energy storage systems (BESS) with local content for projects awarded in Brazil’s first capacity reserve auction for battery systems, scheduled for Dec. 2. To meet nationalization requirements set by the Brazilian Development Bank (BNDES), the engineering company signed a binding agreement with China’s Hyperstrong.
YOU.ON Director Giorgio Seigne told pv magazine Brazil that the solution accredited by BNDES – the first to receive a Finame code confirming compliance with local-content requirements – follows route 1 of the bank’s nationalization methodology.
This route allows the direct-current (DC) block of the storage system, including batteries and power conversion systems (PCS), to be imported. In YOU.ON’s solution, both are manufactured and tested in China.
The approach reduces the risks associated with integrating equipment that has not previously been manufactured in Brazil. Seigne said the company preferred batteries produced and tested at an established Chinese factory with a global delivery record over equipment assembled in Brazil for the first time.
The system’s alternating-current (AC) block, which includes transformers, medium-voltage switchgear, electrical panels and alarm systems, must be sourced from local suppliers. Some components require their own BNDES accreditation. For other items, local-content compliance can be demonstrated through purchase invoices, provided the transactions took place in Brazil. Services must be provided by companies registered in the country.
Seigne said the accreditation process requires documentary evidence, including formal supply proposals and proof of partners’ production capacity. The bank also assesses suppliers’ manufacturing facilities, equipment, technical teams and delivery records.
He said the CFI code confirms that BNDES has assessed and validated the entire production chain.
Not all services count toward the local-content index, Seigne added, making supplier selection and system configuration important parts of the planning process.
Developing the domestic supply chain and securing BNDES accreditation took YOU.ON almost six months, according to Seigne.
Expanding supply
YOU.ON has also identified alternative suppliers for individual components to avoid relying on a single provider if demand from the auction exceeds its initial estimate.
In late October, a company delegation traveled to China with Hyperstrong to explore additional agreements that could increase its supply capacity to between 2 GW and 2.5 GW.
Seigne described Hyperstrong as a strong fit for the capacity reserve auction. He said the Chinese integrator is among the world’s three largest and has installed systems totaling gigawatt-hours across Asia, Europe and the United States.
Beyond supplying the accredited system, YOU.ON is relying on its engineering expertise to compete in the auction. The company is responsible for civil works, mechanical and electromechanical assembly, installation, logistics, supervision, commissioning, start-up, operation and training under a full turnkey package.
Equipment integration is a central part of its role. This involves ensuring compatibility between communication protocols, operating parameters, hardware and software, as well as adapting the system to Brazilian standards and grid codes.
Seigne said that even high-quality components would not deliver the required performance without compatible systems, reliable communication, appropriate configuration and compliance with Brazilian grid codes and standards.
Domestic development
The volume estimated by Brazil’s Energy Research Office (EPE) in its 2025 Ten-Year Energy Expansion Plan (PDE) indicated a need for more than 4 GW of power capacity in the second half of 2028.
Seigne said the scale envisaged for the capacity reserve auction would require adjustments across Brazil’s domestic equipment industry. Existing manufacturers of components such as transformers may need to add shifts, staff and inventory, and expand production capacity to handle larger orders and project schedules.
Under the auction timetable, contracts with winning bidders are expected to be signed around April 2027, with commercial operation scheduled for Aug. 1, 2028. This would leave about 16 months to manufacture, import, localize, transport, install and test the equipment.
Seigne considers the schedule achievable but said logistics must be planned around each project’s location, transport conditions and potential weather-related constraints.
He said continued battery procurement in Brazil would be important for consolidating the domestic supply chain. However, future auctions are likely to require higher levels of local content: route 1, which allows batteries and PCS to be imported, will not be available in a possible new tender in 2028.
Seigne said recurring auctions are essential to sustaining the market. He expects demand for storage to continue growing, while domestic manufacturers will need to keep pace with technological developments and progressively increase local production.
From pv magazine Brazil
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