Brazil Grid-Scale Storage Outlook — August 2026

Prepared 23 August 2026 · Scope: front-of-meter / utility-scale storage · Audience: foreign supplier / developer

Executive summary

• Brazil’s grid-scale storage market is opening now, not later. Law 15,269/2025 gave storage legal standing; ANEEL’s Resolutions 1.161 and 1.162 of June 2026 completed the regulatory framework; and the country’s first battery-only capacity reserve auction (LRCAP-Armazenamento) is scheduled for December 2–4, 2026, with 15-year inflation-indexed contracts.
• The demand driver is real and painful: wind + solar curtailment has run at ~18–20% of potential generation through 2026, with no compensation framework — an urgent system need that storage directly addresses.
• The auction is split into a national-content track (Dec 2) and an open imported-equipment track (Dec 4). Localization is now a competitive lever, not just a financing nicety: BNDES FINAME accreditation and the PPB local-manufacturing rules define what counts as “Brazilian.”
• Headwinds: import duty on BESS raised to 20% (Jan 2026), a dual grid-tariff on merchant-operated storage, and a mandatory grid-forming requirement that filters the PCS supplier field.
• Near-term bankability rests almost entirely on the LRCAP capacity payment — ancillary services and arbitrage remain regulatorily immature.

Market potential

Brazil operates one of the world’s most renewable power systems — 215.9 GW of installed large-scale capacity as of January 2026, of which 84.6% is renewable (ANEEL). Wind (29.6 GW) and solar (48.5 GW) together supply roughly a quarter of generation, concentrated in the Northeast, where transmission buildout has fallen far behind generation growth.

The result is structural curtailment. ONS data show average cuts of ~3 GW through May 2026 — 17.8% of potential wind+solar output — with Northeast solar curtailment reaching 28% in peak periods. January 2026 alone saw 2.86 TWh lost, and cumulative wasted wind/solar energy has reached ~48.7 TWh. Generators bear these losses uncompensated, and the wind association ABEEólica has publicly warned that investment is stalling until the problem is solved. Storage is the system’s most direct remedy, and both ONS and EPE now frame BESS as a strategic asset rather than complementary equipment.

Against that need, the installed base is tiny — roughly 1 GW expected by end-2026 — with ~2.5 GW in active development. Directional forecasts point to 8–12 GW by 2030 and 18–25 GW by 2035, though these figures lack a clearly attributable primary source and should be treated as indicative. The clearest signal of latent demand is the December 2026 auction registration: 6,091 projects totaling 296,807 MW — a record for any Brazilian auction. A separate 2027 auction is planned for a 100 MW / 200 MWh grid-forming system serving isolated regions.

Revenue models

The bankable revenue stream today is the capacity reserve payment: fixed annual revenue, IPCA-indexed, for 15 years, in exchange for availability obligations. ANEEL Resolution 1.162/2026 opens ancillary services, arbitrage, and demand optimization in principle, but payment mechanisms for ancillary services remain opaque, and merchant-operated storage pays grid-use charges on both charge and discharge (the “dual tariff” — see Section 2). No robust PLD-arbitrage economics have yet been demonstrated publicly.

Policy and regulatory framework

The tariff question — two models

ANEEL resolved the contentious “double charging” debate with two coexisting models. Under Model 1 (ONS-dispatched storage), charging is zero-rated and only injection pays grid-use charges — a strong incentive to accept ONS dispatch control and site at grid-beneficial nodes (ONS must publish annual maps of preferred connection points). Under Model 2 (independently operated storage), the dual tariff stands: TUST/TUSD is due on both charging and discharging. This materially weakens merchant arbitrage and ancillary-service business cases and pushes projects toward the auction/capacity route.

The December 2026 auctions (LRCAP-Armazenamento)

• Dec 2, 2026 — “Armazenamento Nacional” (Product 2028 A): restricted to equipment meeting BNDES CFI national-content accreditation; receives priority allocation and access to BNDES/Fundo Clima financing.
• Dec 4, 2026 — “Armazenamento” (Product 2028 B): open to imported equipment — the track where Chinese suppliers (BYD, CATL, Sungrow, Huawei, Envision, HyperStrong have all submitted proposals to MME) are expected to compete head-on.
• Contract: 15 years, fixed annual revenue, IPCA-indexed, supply start 1 Aug 2028.
• Technical minimums: ≥30 MW per project; round-trip efficiency ≥85%; mandatory grid-forming capability; new (unused) cells and inverters only; 4 consecutive hours at max power per cycle; ≤2 cycles/day and ≤366 cycles/year; full recharge within 6 hours.

Financing

BNDES Fundo Clima is explicitly earmarked to finance LRCAP 2026 batteries: reimbursable resources expanded from R$11.2 bn to R$27 bn for 2026; indicative terms ~6.5% p.a., up to 70% of project investment, tenors to 24 years, ticket ceilings of R$500–700 m per economic group per year. Access to FINAME equipment financing requires the equipment to be CFI-accredited (Section 4).

Certification requirements

INMETRO conformity assessment

Portaria INMETRO 140/2022 (amended by 515/2023) is the compulsory certification regime for PV-system equipment — including grid-tied and hybrid inverters (with lithium batteries) up to 75 kW — fully in force since May 2025. Utility-scale PCS above 75 kW falls outside its scope, but component-level battery and inverter certification is still routinely demanded contractually. Process: an accredited certification body (OCP) tests the product against the applicable standards, issues a conformity certificate, and the manufacturer/importer registers it with INMETRO via the Sistema Orquestra platform before sale. Typical cycle: 4–10 weeks; indicative market cost R$8,000–35,000 per model (broker estimates, not an official tariff). Efficiency labeling (ENCE, class A–E) applies to inverters.

Standards landscape

Fire safety

There is no national BESS-specific fire code. Fire approval runs state-by-state through the Corpo de Bombeiros Militar, which issues the [AVCB] permit per project under each state’s own technical instructions — functionally similar to the US “AHJ” model but without an NFPA 855 equivalent. ABNT NBR 17193:2025 (PV fire safety) explicitly excludes buildings containing storage systems. Plan for early, state-specific fire-brigade engagement on any containerized project, and expect UL 9540A thermal-runaway data to be requested as the reference dossier.

ANATEL homologation

Any communication module inside the BESS or PCS (cellular, Wi-Fi, RF telemetry gateways) requires ANATEL homologation (Resolução 715). For batteries in telecom-adjacent stationary applications, Ato ANATEL 5314/2026 requires a chemical-composition declaration and UN 38.3 certification, with family-grouping rules (same chemistry, cell maker, BMS, topology = one family) and renewal every 3 years.

Grid code (ONS)

Connection to the basic network is governed by ONS Procedimentos de Rede Submódulo 2.10 (current revision per REN ANEEL 1.112/2025, effective March 2025), covering LVRT/HVRT and frequency ranges (unrestricted operation 58.5–62.5 Hz; disconnection below 56 Hz). Two storage-specific points matter most for suppliers:

• Grid-forming capability is a mandatory auction eligibility criterion set jointly by ONS/EPE — a stricter bar than the grid-following norm for PV/wind PCS. Confirm your PCS product line’s grid-forming mode and its validation evidence early.
• ONS must propose storage-specific Procedimentos de Rede amendments by ~December 2026. Validated dynamic models for ONS studies (standard for generators ≥10 MW) are expected to extend to BESS; a BESS-specific model-validation submodule is not yet published — verify directly with ONS before bid submission.

Administrative basics

• RADAR/SISCOMEX import registration with Receita Federal is the first gate before any certified product can clear customs.
• ART/CREA: every installation design and execution needs a registered engineer’s ART (technical responsibility annotation) with the regional engineering council.
• Portuguese documentation: manuals, safety labels, and datasheets in Portuguese are part of the INMETRO registration dossier and standard consumer-protection practice.

Localization requirements

BNDES FINAME / CFI accreditation

BNDES’s sectoral regulation for stationary battery (and hydrogen) storage governs which equipment qualifies for FINAME financing through the CFI supplier-accreditation system. It introduces ASCL (selective local-content attribution), effective 1 Nov 2025, with progressive local-content milestones phased in over time. This accreditation is the gate for the priority Dec 2 national auction track and for BNDES-financed projects generally.

PPB — the local manufacturing yardstick

Portarias Interministeriais MDIC/MCTI 54 and 55 (May 2024) define the Processo Produtivo Básico for BESS assembled in Brazil — the scoring system that unlocks fiscal and financing incentives. BESS is defined as battery bank + BMS + PCS + EMS + climate-control/fire-safety components; scoring totals 1,207 points with phased requirements (2024–25 / 2026–27 / 2028+), production performed in Brazil by Brazil-domiciled technicians, and up to 60 bonus points for R&D investment.

What “localization” means in practice

Press reporting and precedent suggest the practical bar is module/container assembly, not cell manufacturing. BYD’s announced R$500 m stationary-BESS investment references “increasing use of Brazil-produced components,” building on its Manaus Free Trade Zone battery-module plant (operating since 2020, most components still imported from China — the ZFM benefit is import-duty and ICMS relief on assembly). The contrasting benchmark is WEG’s purpose-built BESS factory in Itajaí, SC — R$280 m of BNDES financing, up to 2 GWh/yr, completion H2 2027 — a genuine “developed and manufactured in Brazil” play. Note one policy tension worth exploiting: REIDI tax benefits expressly cannot be conditioned on local content, while BNDES financing and the priority auction track require it — imported-equipment projects can still capture REIDI while bidding in the open Dec 4 track.

Tax picture for imported equipment

Market-entry recommendations

1. Bid the Dec 4 open track now; decide on localization with the BNDES CFI thresholds in hand. The open track is the immediate revenue opportunity for imported equipment; the national track plus FINAME/Fundo Clima financing is the medium-term prize that justifies assembly investment (ZFM or a WEG-style dedicated plant).
2. Lead with grid-forming. It is an eligibility criterion, not a differentiator. Prepare validation evidence and ONS-compatible dynamic models before bid submission.
3. Build the certification dossier in parallel, not sequentially: INMETRO (component-level), ANATEL (comms modules, allow for the 3-year renewal cycle), UN 38.3, IEC 62619/62933 reports, plus UL 9540A data for insurers — and engage the state fire brigade early on container siting.
4. Structure around REIDI (no local-content condition) to recover PIS/Cofins on project goods even for fully imported systems, and evaluate ex-tarifário petitions for components without domestic equivalents to blunt the 20% duty.
5. Underwrite on the capacity payment only. Treat ancillary-service and arbitrage revenue as upside until ANEEL/ONS publish transparent payment mechanisms and the dual-tariff burden on merchant operation is clarified.

Key risks and open items

• Auction execution risk: the battery auction already slipped from April to December 2026; the ceiling price is unconfirmed; and press has flagged regulatory ambiguity and competing capacity needs.
• Tariff-policy incoherence: a 20% import duty and unfavorable IBS/CBS treatment cut against the storage-promotion agenda and may keep shifting.
• Local-content definition risk: whether “nationalization” ultimately means container assembly or deeper manufacturing is not yet settled — MDIC is pushing to harden requirements.
• Grid-code gap: storage-specific Procedimentos de Rede modules and model-validation requirements are due but not yet published.
• Fire-safety patchwork: no national BESS fire code; state-by-state AVCB approval adds schedule risk to containerized deployments.
• Unverified figures flagged in this report: 2030/2035 capacity forecasts (no traceable primary source); exact BNDES ASCL thresholds; current II/IPI rates per specific NCM sub-codes; status of INMETRO Portaria 285/2020 for batteries.

References

Legislation and regulation (primary)

• Lei nº 15.269, de 24 de novembro de 2025 — legal recognition of energy storage (Jusbrasil, full text)
• ANEEL — approval of storage rules and grid-use charging (REN 1.161/1.162, Jun 2026) (gov.br/aneel)
• ANEEL — analysis of CP 39/2023 contributions (gov.br/aneel)
• Nota Técnica Conjunta nº 13/2025 — ANEEL storage framework technical note (PDF)
• Portaria MME nº 878/2025 — battery auction directives (PDF)
• Mattos Filho — new storage grant rules and the first battery LRCAP (legal commentary)
• Demarest — Portaria Normativa 118/2025, LRCAP 2026 directives (legal commentary)
• EPE — capacity reserve auction registration guidance (epe.gov.br)
• Brasil BESS — the two tariff models under the new framework

Tax and financing

• Canal Solar — GECEX raises import duty on BESS and inverters to 20%
• PV Magazine Brasil — batteries to pay up to 20% import duty
• Eixos — REIDI and storage systems: implementation questions
• Canal Solar / PSR — taxation as a brake on storage growth
• BNDES — Regulamento Setorial para Armazenamento de Energia (CFI/FINAME accreditation) (PDF — contains ASCL local-content thresholds)
• BNDES — Fundo Clima, energy transition line
• Cenário Energia — Fundo Clima earmarked for LRCAP 2026 batteries
• XP — government pushes local content in the battery auction via FINAME

Certification, standards and grid code

• INMETRO — compulsory conformity assessment programs (Portaria 140/2022 regime) (gov.br/inmetro)
• Portaria INMETRO nº 140/2022 — full text (LegisWeb)
• ONS — Procedimentos de Rede (Submódulo 2.10, connection requirements) (ons.org.br)
• Energes — technical standards for BESS in Brazil: where we are
• Canal Solar — PPB portarias for BESS (MDIC/MCTI 54–55/2024) and ONS/EPE grid-forming mandate coverage

Market coverage

• ESS News — Brazil BESS market and Dec 2026 auction coverage (2025–2026)
• S&P Global Commodity Insights — Brazil curtailment reporting (May 2026)
• PV Magazine — Brazil solar curtailment and storage auction coverage
• Movimento Econômico — ANEEL framework unblocks the battery auction
• ePowerBay — co-located BESS opens a new phase in Brazil