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With 18 GW of registered projects and a potential of R$ 10 billion in investments, Brazil prepares to hold the first exclusive battery auction in its history — and the electricity sector will never be the same
Brazil is about to take a step that no other Latin American country has taken before. The first auction dedicated exclusively to battery energy storage systems (BESS) is scheduled to take place between April and June 2026.
According to data from PV Magazine Brasil and the Brazilian Association of Energy Storage Solutions (ABSAE), there are approximately 18 GW of battery projects ready for registration.
The initial demand is 2 GW — equivalent to 8 GWh in 4-hour usage scenarios. However, industry players estimate that the volume could reach 5 GW.
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The potential for mobilized investments exceeds R$ 10 billion.
Why batteries and not thermal power plants: the R$ 3.2 billion per year saving
The logic behind the battery auction is economic. The cost of batteries is dramatically below that of gas and oil thermal power plants.
The estimated ceiling price for BESS is between R$ 1 million and R$ 1.7 million per MW per year, according to ABSAE. For thermal power plants, the value ranges from R$ 2.25 million to R$ 5 million per MW per year.
With 2 GW of batteries contracted instead of thermal power plants, the estimated annual saving is R$ 3.2 billion.
Furthermore, battery projects come into operation in 14 to 28 months — the fastest in just 14 months. Thermal power plants take years.
- Initial demand: 2 GW (~8 GWh)
- Registrable projects: 18 GW (ABSAE)
- Potential investments: R$ 10 billion
- Savings vs thermal: R$ 3.2 billion/year
- Operation timeline: 14 to 28 months
- Power deficit until 2034: 55 GW (PDE)
The 55 GW deficit that forces Brazil to act: batteries are part of the solution
The Ten-Year Energy Expansion Plan (PDE) projects a power deficit of 55 GW until 2034 in the National Interconnected System (SIN).
“These 55 GW will be met via thermal, hydroelectric, demand response, various solutions. So the first 2 GW auction makes perfect sense — you won’t contract all 9 GW in a single tender, that would be excessive,” stated Markus Vlasits, president of ABSAE.
The Minister of Mines and Energy Alexandre Silveira confirmed that the auction is expected to contract about 2 GW, coinciding with industry calculations.
The auction takes place within the scope of the Capacity Reserve Auction (LRCAP), a mechanism created to ensure firm power to the electrical system in the face of the expansion of intermittent sources such as solar and wind.
The inauguration of green hydrogen plants in Brazil shows that the country is investing in multiple fronts of the energy transition.
Huawei, BYD, CATL: the giants that want to supply batteries to Brazil
The Brazilian auction has attracted international attention. In bilateral meetings in Jakarta, Indonesia, Minister Silveira consulted companies such as Huawei Digital Power, BYD, CATL, Envision, Sungrow, and HyperStrong.
All presented large-scale battery solutions for the Brazilian market.
Competition between Chinese and American suppliers could benefit Brazil with more competitive prices and cutting-edge technology.
EPE registered over 125 GW in 368 projects for the general LRCAP of 2026, including thermal, hydroelectric, and battery projects. Innovation in residential storage with plug-and-play solar panels complements this smaller-scale expansion.
Regulatory hurdles and flexible dates: what could delay the auction
On the other hand, the path is not free of obstacles. The issue of “double tariff” and cost allocation — regulated by Law nº 15.269/2025 — generate legal uncertainty and the risk of litigation.
The specific ordinance for BESS has not yet been published. The original draft foresaw April 2026, but Minister Silveira indicated that it could occur “until June”.
Furthermore, although 18 GW are ready for registration, the initial auction will contract only 2 GW. The 55 GW deficit will require multiple auctions over the coming years.
The commercial and industrial sector is already moving 500 MWh in storage in 2026, indicating that private demand is not waiting for the public auction.
Still, Brazil’s first exclusive battery auction marks a structural change in the electricity sector. For the first time, the country officially recognizes that storage is not a complement — it is essential infrastructure.
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