Brazil's first battery storage auction, scheduled for December, is entering the final stretch of preparation without an answer to a basic question: who pays the bill. The two capacity reserve tenders for storage systems are set for December 2 and 4, with 15-year contracts and power supply starting in August 2028, but part of the electricity sector already treats a postponement as certain, according to Folha de S.Paulo. Aneel, the national power regulator, will debate the draft tender rules at a public hearing on Tuesday (September 1) in Brasilia and is accepting contributions until September 14.
The deadlock stems from a rule written into Law 15.269/2025, which determined that battery costs must be paid exclusively by power generators, instead of being split among all system users through tariff charges, as happens in other capacity reserve auctions. The problem is that Aneel has yet to define how that split will work: which generators will share the burden and how much each will pay. In recent days, the agency's own technicians have begun weighing the inclusion of hydroelectric and thermal plants in the cost pool, according to reports by Valor Economico and MegaWhat.
Representatives of the battery, wind and solar industries argue that capacity reserve is insurance for the system as a whole, the contracting of extra power to guarantee supply at times of greatest need, and that the cost should therefore be shared by everyone, with a pass-through to consumers on their electricity bills. Defenders of the current rule say the charge should fall on those who made the auction necessary: the generators themselves, whose intermittent output requires flexibility. According to Folha, even under the current design consumers will pay indirectly, because generators are expected to pass the cost into contracted energy prices and companies will build it into their bids.
The market at stake
The size of the business helps explain the pressure. Battery storage is seen as the answer to curtailment, the forced shutdown of renewable generation when the transmission grid cannot absorb output. In 2024 alone, Brazil's Northeast concentrated 75% of the country's renewable generation interruptions, with more than 330,000 hours of suspended production and losses above R$1.6 billion, according to a survey by consultancy Volt Robotics cited by Movimento Economico. Deloitte estimates the segment could attract R$57 billion in investment by 2035, and Absae, the storage industry association, calculates that contracting 2 GW of batteries would unlock around R$10 billion.
The two tenders, created by Normative Ordinance 136/2026 of the Ministry of Mines and Energy, will have distinct formats. In the national auction, batteries must be manufactured in Brazil under accreditation criteria set by state development bank BNDES. In the general auction, imports are allowed. Project registration set a historic record for a first auction, according to the EPE, the federal energy research agency. The final version of the tender documents is expected in late October.
In Congress, bill PL 3.716/2026, authored by lawmaker Arnaldo Jardim, would revoke the exception created in 2025 and restore the general cost-sharing rule for batteries. In an op-ed published by CNN Brasil, Absae's executive director Fabio Monteiro Lima argued the auction should not be held hostage to prior regulation of the cost split, citing the 2021 precedent: the first capacity reserve auction was held in December of that year, contracts were signed in July 2022 and the cost-sharing rule was only concluded in October 2024, before the plants entered operation.
For generators and investors, the uncertainty raises regulatory risk and tends to make bids more expensive, either through weaker competition or higher built-in prices. For consumers, the bill arrives one way or another: directly on the tariff, if the cost is shared across the system, or diluted into contracted energy prices, if it stays with the generators.