Beyond auction guidelines that underwent public consultation in November, market participants await clarity on grid connection rules and transmission charges for battery systems. Aneel postponed a vote on Public Consultation 39 last week after director Willamy Frota requested additional review time. Felipe Calabria, Aneel’s superintendent of generation services and electricity market regulation, acknowledged the challenge of classifying batteries within existing legal frameworks, noting they function neither as traditional consumers nor generators. The current regulatory approach focuses on integrating storage into the National Interconnected System to optimize grid operations while providing appropriate economic signals for battery investments.
A primary investor concern involves potential double charging for grid use, with batteries potentially taxed both when drawing power for charging and when injecting power during discharge. The regulatory uncertainty occurs as curtailment pressures intensify. The national system operator suspended generation from 445 solar projects for 400,000 hours in 2024, representing 14.6 TWh of wasted energy valued at 1.6 billion reais. Current compensation rules cover only a fraction of curtailment incidents, leaving most generators uncompensated. The government canceled the first Capacity Reserve Auction, originally intended for hydroelectric expansions and thermal plants, jeopardizing the second auction scheduled for 2026 that would contract large-scale battery systems. Canadian Solar’s Brazil operations, which contracted 91 GWh of storage globally in Q1 2025 with 3.2 billion dollars in estimated order value, reported that Brazilian investors remain hesitant pending regulatory resolution.
This article was curated and published as part of our South American energy market coverage.
