Brazil has begun paving the way for future hydro storage auctions, with pumped-storage hydroelectric plants as one of the main technologies under analysis to bring power and flexibility to the electricity system.
The Energy Research Company (EPE) presented a work plan that anticipates different stages of the future competitive procedure and plans to begin in October with the publication of the registration instructions for Hydraulic Storage Systems (HSS) projects.
A month later, in November , the call for projects will open. The goal is to identify existing initiatives in Brazil, assess their level of development, and determine the potential capacity to meet the future needs of the National Interconnected System.
This stage will not yet function as a pre-selection process for a future auction. EPE emphasized that it will be consultative and informative in nature and will serve to calibrate the criteria that could be used later, identify risks, and detect any potential regulatory gaps.
The move aligns with guidelines set by the National Energy Policy Council to explore contracting for hydroelectric storage services through auctions or other competitive mechanisms . The Brazilian government believes that pumped-storage hydroelectric plants can provide power, operational flexibility, resilience, and support for integrating variable energy sources such as solar and wind.
The first phase will be structured around three axes.
On one hand, the maturity level of the projects will be analyzed, including inventory and feasibility studies, permits and land availability.
Technical characteristics will also be examined, such as power, storage capacity, performance, design, and interaction with the electrical system.
The third section will be related to costs and schedules , including Capex, Opex, implementation timelines and key critical paths to bring each initiative to construction.
The intention is that this data will allow us to determine whether Brazil currently has a sufficiently advanced pipeline to justify future competitive procurement.
“The call for projects is a fundamental step to understand sectoral energy planning and determine if there are projects under development in the country with a volume compatible with the growing demand of the National Interconnected System,” said Thiago Prado, president of EPE.
According to the agency, this information will be key to assessing whether there are sufficient conditions for the granting authority to subsequently proceed with a competitive process.
Reversible power plants are gaining ground alongside the battery boom
The progress on hydroelectric storage comes as Brazil also accelerates the development of BESS.
The country is preparing its first specific battery auctions for December, which registered 6091 projects for 296.8 GW , a scale that reflects the strong investor interest in the new flexibility needs of the system.
Reversible power plants aim to cover part of that same challenge, albeit with different characteristics.
This type of asset uses two reservoirs located at different heights. During periods of lower demand or excess generation, water is pumped to the upper reservoir. When the system needs energy, it is pumped back down and generates electricity.
Its advantage is especially linked to the possibility of providing long-term storage, power and operational flexibility , functions that gain relevance as solar and wind participation grows.
EPE will also work with the Ministry of Mines and Energy and ANEEL on updating cost bases, economic and financial parameters, contracting criteria and socio-environmental impacts.
In environmental matters, the agency also highlighted the recent possibility that reversible power plants may access the Special Environmental License , a mechanism aimed at providing greater predictability to projects considered strategic.
The Brazilian Association of Electric Power Generating Companies (ABRAGE) valued the move because it allows for discussions on technical, economic, and environmental criteria before future contracts are structured.
The call for applications will begin in November through a temporary mechanism for receiving documentation, while the EPE finishes developing a specific module within its AEGE system, the completion of which is scheduled for January 2027 .
Brazil is thus opening a second front in its energy storage strategy. While batteries are already moving towards the first tenders, pumped-storage hydroelectric plants are now beginning the preliminary steps: identifying projects, assessing their maturity, and establishing the rules that could underpin future auctions .