Brazil Advances Battery Storage Integration Through New Capacity Auctions

The Brazilian Ministry of Mines and Energy (MME) has issued Ordinance No. 136/2026, establishing the guidelines for the first Capacity Reserve Auctions (LRCAP) dedicated exclusively to Battery Energy Storage Systems (BESS). This represents an important milestone for the integration of energy storage into Brazil's power sector, creating a dedicated capacity procurement mechanism and recognizing the strategic role of battery storage in enhancing the reliability, flexibility, and security of the National Interconnected System.

The auctions are scheduled to take place in December 2026 and will provide for long-term agreements with a 15-year term-and-supply commencement in August 2028. Key features include the implementation of two separate auctions, one of which will include minimum local content requirements, incentives for projects located in regions identified by the National System Operator (ONS) as priorities for storage deployment, and specific rules regarding grid access, ONS dispatch, and penalties.

The publication of the guidelines comes amid increasing discussions regarding the expansion of energy storage capacity in Brazil, particularly as intermittent renewable sources continue to gain a larger share of the country's electricity matrix. In this context, the auctions may create significant opportunities for investors, developers, and other market participants seeking to enter a rapidly growing segment.

For a more detailed analysis of the auction framework, participation requirements and the potential impacts of the LRCAP BESS 2026 auctions, please refer to our full publication.