Brazil Set to Release Initial Energy Storage Regulations in 2024

Brazil’s national electricity regulator, ANEEL (Agência Nacional de Energia Elétrica), is preparing to publish the country’s first set of formal rules governing energy storage in the second half of 2024. According to Daniel Danna, the rapporteur for Public Consultation No. 39 of 2023 and a director at ANEEL, these initial regulations will focus on grid access, operational use, and compensation mechanisms for storage systems, including multi-revenue streams.

Speaking during a public hearing held by the Chamber of Deputies’ Committee on Mines and Energy, Danna confirmed that ANEEL is finalizing a regulatory impact assessment and a draft normative resolution that is expected to be approved later this year. The forthcoming rules will also lay the foundation for participation in grid and isolated system capacity auctions.

Beyond the initial phase, two more stages of regulatory development are planned, extending through 2028. The second phase will address the regulatory classification of "reversible" storage facilities, the role of storage as a grid asset within transmission and distribution systems, and how storage can help manage curtailment and constrained-off events. A third round of consultation will explore the concept of storage as a service aggregator and conduct technical simulations.

Danna also noted that budget constraints within regulatory institutions have posed challenges to the speed and scope of regulatory development in the storage sector.

The hearing underscored the importance of energy storage in addressing the operational pressures created by Brazil’s rapid expansion of renewable energy, particularly solar and wind. As these variable sources grow at a pace that outstrips transmission upgrades and demand growth, the National System Operator (ONS) faces increasing difficulty in managing supply, especially during midday solar peaks and evening demand spikes. The country’s existing hydroelectric infrastructure, which comprises more than half of Brazil’s 103GW installed capacity, struggles to respond to such dynamic load shifts.

Christiany Salgado Faria, director of planning and concessions for power generation at the Ministry of Mines and Energy (MME), emphasized that under the country’s 2034 Decennial Energy Expansion Plan (PDE 2034), an additional 5.5GW of generation capacity will be needed by 2028 to meet system requirements. That figure is projected to rise to over 35GW by 2034.

According to the plan, the share of hydroelectric generation in Brazil’s energy mix is expected to decline by 10 percentage points—from the current level of 36%—by 2034. Meanwhile, the share of renewable energy is projected to rise: distributed solar generation could grow from 13% to 18%, and centralized wind and solar generation is expected to increase from 21% to 24%.

“In this context, energy storage is critical to meeting the system’s growing flexibility and reliability needs,” said Salgado Faria. She added that the ministry has proposed an energy storage auction model as part of Public Consultation No. 176 of 2024. While the final guidelines are still under discussion, the proposal outlines 10-year contracts, beginning July 1, 2029, requiring systems to provide four hours of dispatchable power daily under the coordination of the ONS. Fixed remuneration would be indexed to Brazil’s national consumer price index (IPCA).

Rodrigo Sauaia, president of the Brazilian Photovoltaic Solar Energy Association, voiced concern about delays in the implementation of a dedicated battery storage auction. Speaking to committee chair Congressman Diego Andrade, Sauaia referenced legal challenges that have already stalled capacity reserve auctions for thermal and hydroelectric technologies.

“There’s been discussion suggesting that battery auctions will only proceed after thermal and hydro auctions,” said Sauaia. “But this technology is mature and deployment-ready. We urge the Ministry of Mines and Energy and members of Congress not to delay this opportunity. A battery auction in 2024 would send a strong signal of Brazil’s commitment to energy innovation—particularly in the year of COP 30.”