Dozens of battery system manufacturers are considering evaluating production facilities in Brazil , according to industry sources.
The goal is to be able to supply the stand-alone BESS project auctions that will take place in December, which could be the gateway for future calls for tenders, considering that 6,091 projects representing 296.8 GW registered interest in participating.
“The auction forecast and the national content requirement are perfectly intertwined, because there cannot be a local content policy without a demand forecast,” said Markus Vlasits , president of the Brazilian Association of Energy Storage Solutions (ABSAE) and CEO of New Charge , in an exclusive interview with Energía Estratégica .
“In fact, there was a very large expression of interest in which the National Bank for Economic and Social Development (BNDES - the institution that will certify national content) announced that it is talking with more than 20 different BESS manufacturers interested in, in principle, establishing battery factories in Brazil,” he explained, alluding to the fact that the continuity of the contracts will be decisive for that interest to turn into investment.
The truth is that Brazil reaches this stage with around 2 GWh of BESS implemented and operational , although without large projects and only distributed among pilot plants, commercial and industrial solutions, solar-associated systems for rural electrification and a single larger initiative associated with transmission.
“ I personally believe that it won't be a single auction, but rather a series of flexibility auctions for storage . I think that 4 or 5 GW of power (16 to 20 GWh of storage capacity) would even be a good first framework,” said the president of ABSAE.
“We are finally moving beyond the realm of ideas, and the storage market in Brazil is beginning to take shape. We are now entering the first phase of expansion. We have 300 GW of projects registered in the first auction, which means there is no shortage of interest,” stated the president of ABSAE.
It's worth noting that the projects must exceed 30 MW and include four hours of storage capacity . Supply will begin on August 1, 2028 , with 15-year contracts.
While the market is working with an awardable reference of 2 to 5 GW (equivalent to 8 - 20 GWh ) after the 296 GW registered, that number of offers will have to be reduced after the technical filters, particularly due to the available network capacity .
The first round will also serve to set a concrete price reference , where payment to the winning projects will be made through a Fixed Annual Prescription (RCA) paid in 12 monthly installments , updated by IPCA.
Vlasits contrasts that model with the contracts made this year: 17 GW thermal and 2 GW hydroelectric , with approximately 60% of existing thermal plants and the rest corresponding to new units.
As an economic reference, Vlasits mentions the recently awarded contracts for existing and new gas-fired thermal power plants ( 17 GW x R$ 2.5 million), hydroelectric plants (2 GW for R$ 1.6 million) and oil-diesel plants for R$ 800,000 , the latter with additional variable costs.
“ I am fully convinced that, looking at the overall cost, the sum of the fixed and variable values, BESS systems will be far more competitive solutions in terms of price, because their variable cost is 0 ,” he says.
There are still tax variables to be defined, so the fixed price is not yet finalized. But the bidding process will reveal two key pieces of information: the effective cost of the systems and the actual availability of equipment capable of handling local content .
“I think we will be very surprised by the competitiveness, but it will also be a sign of the real availability of BESS with local content, of the real cost of those available systems,” he adds.
For projects that are left out, the immediate solution does not appear to be in a merchant market like the Chilean one, given that the main obstacle is the current formation of the Settlement Price of Differences (PLD) .
“It’s a methodology that, in a way, ends up masking the real scarcity or abundance of energy. Since we don’t have that price signal properly calibrated, for the time being it will be quite difficult, at least for large projects,” the specialist pointed out.
“The major projects that aren’t awarded will likely wait for the next auctions or new contracts. We’re talking a lot about auxiliary services, but it seems like that topic has stalled a bit here,” he emphasized.
B2B can outperform the centralized marketplace
The situation is different behind the meter. Distribution usage tariffs already generate sufficient signals in certain regions to make commercial and industrial projects viable .
Until now, many large consumers in the deregulated market contracted renewable energy sources with discounts on infrastructure usage fees. This advantage reduced the difference needed to justify energy storage systems.
A legal amendment passed last year began to change that equation. Consumers who already have the benefit will be able to keep it for their current charging profile, but new users and increases in demand will no longer have access to the same discount .
“In the medium term, this will be a very relevant accelerator for BESS behind the meter, because it will remove a subsidy that was very damaging because it was hindering the implementation of projects,” Vlasits stated.
“For the C&I sector, we are already seeing the first signs of growth. It is a sector that is growing very rapidly. And I believe that growth will accelerate in the coming years,” he added.
“ When we look at the numbers again in 2032 or 2033, it is perfectly feasible that there will be more decentralized than centralized BESS, just as has happened with the growth of solar energy ,” Vlasits projects.
The long-term estimate combines auctions, B2B, and off-grid solutions in northern Brazil. ABSAE is targeting approximately 80 GW of BESS by 2034 .
With almost 300 GW registered , an initial contract expected to be up to 5 GW , new incentives for the segment behind the meter, and more than 20 manufacturers evaluating local production , Brazil is beginning to define not only how much storage it will incorporate, but also what part of that value chain it will be able to develop within the country.