The energy storage market in Latin America is entering a period of rapid and sustained expansion. Wood Mackenzie 's Latin America Energy Storage Outlook 2026 report projects that cumulative capacity will grow from 2.5 GW in 2025 to 34 GW by 2035, representing a compound annual growth rate (CAGR) of 30%.
The acceleration of bidding processes, the increase in energy spillover, and a transmission infrastructure that has not been modernized are the main factors driving this growth.
“In Latin America, the energy storage market is expanding; it is already an active market. The number of projects under development is growing rapidly, but implementation is stalling without comprehensive regulatory frameworks that include clear remuneration mechanisms,” said Pamela Morales , research analyst at Wood Mackenzie.
Chile remains the regional leader and hosts the largest battery energy storage system (BESS) projects currently operating in Latin America. High levels of energy curtailment continue to drive investment in longer-life systems.
However, price cannibalization in the northern network represents an emerging risk, as it reduces arbitrage revenues as storage is brought into the market more readily.
The Mexican market is at a turning point driven by public policies. It is expected that binding planning instruments—including the first call for priority projects and the mixed scheme with the Federal Electricity Commission (CFE), both with mandatory storage—will allow for the allocation of more than 3 GW of storage capacity by 2030.
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Brazil's energy storage market is poised for a significant leap forward. A dedicated battery tender, scheduled for December 2026, will spur new projects starting in 2028. However, without clear remuneration mechanisms, project financing will remain challenging in the short term.
Argentina has made rapid progress in establishing an energy storage market through bidding processes. Recent rounds have awarded a total of 1.3 GW of stand-alone storage capacity . Operations are expected to begin in 2027, providing critical support for electricity transmission.
The Dominican Republic has the most structured regulatory framework in the Caribbean. The requirement for storage capacity equivalent to 50% of solar capacity is driving short-term implementation, while the government aims to reach 500 MW by 2030 .
The deployment of storage in Latin America continues to be limited by the absence of remuneration mechanisms that allow for obtaining financing and clear regulatory frameworks.
Most markets lack defined remuneration for ancillary services and energy arbitrage, making it difficult to demonstrate the long-term financial viability of projects. Financing constraints, permitting delays, and a limited number of energy buyers exacerbate the challenge.
“Latin America still needs to find a balance between requirements and incentives to develop the market. Countries that establish regulatory frameworks with clear remuneration mechanisms to finance projects will attract the investment needed to sustain growth well beyond the current wave driven by public policies,” Morales noted.
“The next decade will distinguish between markets that merely advertise capacity and those that successfully implement it,” he added.