Electricity Storage: ANEEL’s new Energy Storage Systems Regulation and the first Capacity Reserve Auctions

The recent approval by ANEEL (Brazil's electricity regulator) of the regulatory framework for electricity storage systems, together with the publication of Directive 136/2026 by the Ministry of Mines and Energy (MME), consolidates the large‑scale deployment of battery storage in Brazil's power grid, the National Interconnected System (SIN). These developments bring together key priorities for the sector, including security of supply, integration of variable renewable generation, modernization of system operations, and support for domestic industry.

1. Legal and Regulatory Framework

_{1.1. Law 15.269/2025}

Law 15.269/2025 established Brazil's first general regulatory framework for electricity storage and lays the foundation for regulating storage activities in the sector.

In practical terms, the Law formally recognizes energy storage as a regulated activity within the electricity sector and authorizes ANEEL to oversee it, with powers to establish pricing and grid‑access rules for storage systems.

The Law allows storage to be developed either as a stand‑alone activity or integrated with generation, transmission, distribution, and trading activities. It also allows storage systems to provide a range of services to the electricity system, including flexibility, capacity, ancillary services, and energy trading, subject to the restrictions applicable to each type of market participant.

In the context of system planning and expansion, the Law provides that storage systems must generally be procured through auctions, with the technical requirements and connection points defined in advance. Pumped‑storage hydropower plants are treated differently, as their location in the transmission grid is determined through planning studies.

For battery energy storage systems contracted as capacity reserve, the Law establishes a specific rule under which procurement costs are allocated exclusively to electricity generators, as defined by ANEEL regulation. This is a key feature of the new framework, as it directly shapes cost allocation and project economics for storage assets awarded through Capacity Reserve Auctions (LRCAP – Leilões de Reserva de Capacidade).

The Law introduces specific incentives for storage projects, including eligibility for REIDI (a special system of federal tax benefits for infrastructure development), with the aim of promoting the energy transition, modernization and stability of the electricity sector. It also caps the overall amount of REIDI benefits, places their administration under the MME, and allows the government to reduce import taxes on BESS and their components, supporting investment in the sector.

_{1.2. ANEEL Storage Regulation}

On 2 June 2026, following a public consultation process, ANEEL approved the Energy Storage Systems Regulation, establishing the first operational rules for their integration into Brazil's power grid.

The regulation introduces a differentiated grid‑charging framework for battery energy storage systems, depending on their mode of operation. Stand‑alone systems that are fully dispatched by the system operator, the ONS (Brazil's national power grid operator), benefit from reduced grid charges, which apply only to the generation component. In contrast, systems operating independently remain subject to standard rules and must bear the costs associated with both charging and discharging.

In approving the regulation, ANEEL also introduced operational measures to support the integration of storage into the grid. The resolution requires the ONS to publish annual maps identifying optimal connection points for battery installations and to update the Grid Procedures to incorporate the new rules.

2. Guidelines for the first Capacity Reserve Power Auctions

On 3 June 2026, Brazil's Ministry of Mines and Energy (MME) issued Directive 136/2026, setting out the guidelines and procedures for the first auctions to procure capacity from new battery energy storage systems (BESS).

These auctions will contract capacity through Capacity Reserve Power Agreements (CRCAP – Contratos de Potência de Reserva de Capacidade), with the objective of ensuring security of supply in Brazil's national power grid, the SIN.

Project eligibility and participation conditions are defined with some flexibility. Storage projects may participate in the auctions either through dedicated grid connections or by sharing connection infrastructure with other projects at the same point in the transmission network.

The registration period for project submissions will run from 15 June to 31 July 2026. At the qualification stage, projects are not required to have environmental licenses in place, which lowers the entry barrier for participation. The auction notice will instead establish deadlines for successful bidders to obtain the required licenses before project implementation.

Projects must meet a set of minimum technical requirements to be eligible for the auctions. In particular, storage systems must have at least 30 MW of capacity, be capable of operating at full output for a minimum of four consecutive hours, achieve total efficiency of at least 85%, and be able to fully recharge within six hours. Projects with non-zero variable costs are not eligible.

In addition, projects must use new battery systems and comply with the grid‑connection requirements defined by the ONS, including grid‑forming capabilities.

Contracted projects must comply with all charging and discharging instructions issued by the ONS, both in day‑ahead scheduling and real‑time operation of the national grid. They must also ensure the delivery of maximum capacity for a minimum of four hours per cycle, in line with the performance requirements defined by the system operator.

In return, they receive a fixed annual payment (Fixed Revenue), which is set through the auction process and paid in monthly installments. This remuneration is subject to performance adjustments, and may be reduced if operational requirements are not met in previous periods.

The contracts will include penalties for non‑performance, including failure to deliver committed capacity or to comply with centralized dispatch instructions for both charging and discharging. For the Storage Capacity 2028 A product, additional penalties apply if the project fails to meet local content requirements. For this product, contract execution is also conditional upon demonstrating compliance with local content requirements as assessed under BNDES accreditation criteria.

The total volume of capacity to be procured in the auctions will be defined by the MME.