October 18, 2024: Brazilian minister of energy and mining, Alexandre Silveira de Oliveira, has announced the country’s first large-scale battery storage auction to be held in 2025.

A public consultation ahead of the auction will be held in the coming days and, according to a draft of auction rules published by the ministry, the procurement exercise will be held for systems with a power output of at least 30MW that can store energy for at least four hours a day.

The draft also specified that the contracts would cover a period of 10 years, with operation scheduled to start in July 2029.

Silveira said that the goal of the battery auction was to promote battery technology in Brazil and attract large manufacturers such as Huawei from China and other nations.

The news was welcomed by the country’s renewable sector, with the Brazilian Association of Electric Energy Storage Solutions (ABSAE) saying they considered the announcement as a “significant progress”.

The launch of a dedicated BESS auction in Brazil could help boost the growth of the technology in the country and further enhance the use of renewables such as solar PV and wind.

Winners of the auction will receive payments for their commitment to ensure availability when needed, whether or not electricity is actually dispatched, in a system designed to ensure grid reliability during periods of high demand or unexpected events, such as extreme weather or outages in generation capacity.

Brazil’s battery storage market is still in its infancy, with only a limited number of projects in operation. However, the country boasts one of the cleanest energy grids globally, with 84% of its electricity generated from renewable resources. Hydropower dominates this mix, but with increasing drought conditions hurting hydroelectric production, the government is pushing for greater investment in wind and solar energy.

Silveira noted the importance of using batteries to support intermittent energy sources, such as wind and solar, without rushing the process or overburdening consumers. He said the government’s priority is reducing energy costs and ensuring energy security despite pressure to speed up projects.

The minister claimed that Brazil has sufficient contracted energy to meet demand, even during severe droughts. He highlighted the activation of thermal power plants to offset the reduced hydroelectric generation.

“We have enough contracted energy,” Silveira said, noting that future auctions aim to guarantee energy security for six to seven years.

Silveira added that Brazil’s energy demand is rising due to climate effects, indicating the need to double the country’s thermal power capacity by 2031. He also requested a contingency plan to maintain system stability during the summer months.