Brazil's first energy storage auction could contract between 2 and 5 GW of power , lasting four hours, equivalent to a capacity of between 8 and 20 GWh , according to estimates circulating among market players. However, the Brazilian Photovoltaic Solar Energy Association (ABSOLAR) believes the scale of this initial call for bids will not be enough to attract manufacturers and consolidate an industrial battery supply chain if the government does not guarantee new contracts.
“The most important thing is that we are asking the Government to hold annual auctions, so that we have a record of the contracted volume that allows companies to strategically position their structures, reduce costs and turn Brazil into a market with the potential to attract the manufacture of storage equipment,” said Rodrigo Sauaia , CEO of ABSOLAR, in an interview with Energía Estratégica .
Brazil will hold its first specific tenders for energy storage in December. The December 2nd tender will be reserved for systems that demonstrate the use of domestically manufactured batteries, while the December 4th tender will accept equipment produced in any market.
The draft tender documents stipulate 15-year contracts, with supply starting on August 1, 2028. Projects must have a minimum capacity of 30 MW, a duration of four hours, and availability for up to two dispatches per day, with six hours to recover the full load.
For Sauaia, the incorporation of local content must be supported by a demand signal that exceeds the initial call.
“It is a very significant volume for the country's first auction,” he noted regarding the potential 2 to 5 GW.
An annual schedule would allow developers, integrators, and manufacturers to plan investments, reduce costs, and size production capacities.
Continuity also appears as a condition for Brazil to regain ground against other markets.
“We are approximately ten years behind,” the executive acknowledged during the XII LATAM Renewables Congress , comparing Brazil’s progress with countries such as Chile, Argentina, the United States, China, India, Australia, Japan, and Germany.
However, he stated: “Brazil, due to the size of its market, which is the largest electricity market in Latin America, can make up for the delay with structured auctions.”
The allocation of costs remains pending
Brazil made progress in June with the regulation of autonomous systems through Normative Resolution 1.161/2026 , which established the conditions for authorizations, network access and operation of these assets.
However, one of the central economic aspects of the tenders still needs to be regulated: who will bear the costs and under what criteria they will be distributed.
Law 15.269 , approved at the end of 2025, stipulated that the costs of contracting battery storage systems be distributed exclusively among the generators, under regulations to be issued by the National Electric Energy Agency (ANEEL).
“There is still no clear rule on how to apply this new guideline,” Sauaia warned.
ABSOLAR questions the change because it believes that the charge will end up being incorporated into the price of the energy offered.
“If we make the generators pay, the cost of energy will be higher, and consumers will pay for it indirectly. There is no benefit. It is simply a more complex structure that creates difficulties and uncertainty for the market,” he argued.
The organization is working with political figures in Congress to overturn that section of the law. Sauaia believes the discussion could resume after the federal elections in October, although he stressed that the sector needs a decision before the auction.
Continue reading
“The projects will start operating in 2028, so we have some time, but ideally we would have a clear rule now, before the auction,” he said.
A tax burden exceeding 80%
The tax structure also puts a strain on the goal of developing a local industrial chain.
“Today in Brazil, incredibly, the energy storage system is subject to an 80% tax. And it's not just the import taxes, which are close to 20%. The other national taxes are also very high, even if the battery is produced in Brazil,” warned the ABSOLAR representative.
The association seeks to ensure that energy storage receives tax treatment equivalent to that of solar, wind, and other renewable energy sources.
The discussion gains relevance given the government's decision to reserve one of the auctions for domestically manufactured equipment. According to ABSOLAR, this local preference may generate initial demand, but it will not, on its own, offset the tax burden or the lack of visibility regarding future contracts.
“We want to change that to achieve the same level of taxation applied to solar, wind, and renewable energy sources,” he stated.
The strategy promoted by the entity thus combines three fronts: a recurring auction schedule that ensures volume, a regulatory definition on the distribution of costs, and a tax reform that improves the competitiveness of equipment manufactured or integrated within the country.
Energy storage is gaining ground as renewables advance.
Brazil has more than 72 GW of solar power in operation , compared to the 0.01% that the technology represented in its electricity mix in 2013. About 68% of that capacity corresponds to distributed generation, while large-scale power plants account for between 20 and 22 GW .
However, the expansion of renewable energy began to strain the operation of the system and slow down new investments.
“The solar and wind energy sectors are facing their biggest crisis yet due to renewable generation cuts, a lack of electrical infrastructure, and lower-than-expected consumption,” the executive noted.
ABSOLAR began working specifically on storage in 2019. The CEO highlighted that the approval of the regulation for stand-alone projects and the holding of the December tenders mark the effective start of the large-scale Brazilian market.
However, he noted that rules for combined renewable energy systems and for behind-the-meter installations still need to be developed.
The first auction will open up unprecedented demand for the country. According to ABSOLAR, whether this contracting will lead to manufacturing investments will depend on Brazil's ability to transform the process into a sustained policy.
“We need proof of the contracted volume,” Sauaia insisted.
According to the expert, the opportunity lies not only in awarding the first GW, but in ensuring that companies find a market with scale, continuity, regulatory predictability and tax conditions to produce.
Strategic Energy will be present at Intersolar
LATAM is going through a key moment for the expansion of renewable energies, driven by new regulatory challenges, the growth of electricity demand and the development of storage.
In this context, Energía Estratégica will be present at two of the leading solar industry events in Latin America: The Smarter E South America, from August 25 to 27 in São Paulo, Brazil, and Intersolar Mexico, from September 1 to 3 in Mexico City. From both events, the publication will provide special coverage with exclusive interviews, regulatory analysis, and the key developments that will shape the regional markets.