The Brazilian Energy Storage Association Predicts That The Market Will Consolidate By 2026.

The Brazilian Energy Storage Association (ABSAE) anticipates market consolidation and regulatory improvements in the Brazilian commercial and industrial (C&I) energy storage sector by 2026, with capacity auctions potentially introducing 2 GW/8 GWh of energy storage projects.

 

ABSAE Executive Director Fábio Lima stated that demand for C&I energy storage systems is strong and deployment is rapid, with positive recommendations from existing users accelerating market adoption. While safety remains a critical consideration, particularly concerning battery energy storage system fire incidents, advancements in technology and standards are bolstering confidence. Although full-year 2025 data is not yet finalized, this deployment momentum is expected to continue into 2026, based on the number of projects observed by members. The passage of new renewable energy regulations has also stimulated market development, with 2026 considered a year of regulatory consolidation.

 

 

 

C&I energy storage applications are continuously expanding, encompassing grid-connected and off-grid solutions for agribusiness, and are widely used in locations with significant day-night load variations, such as hospitals, educational institutions, and shopping malls. The role of a reliable energy storage battery supplier is paramount, providing not only electrochemical battery energy storage solutions but also ensuring comprehensive safety integration. Capacity reserve auctions are central to the optimistic market outlook; although the rules are still under discussion, at least 30 MW projects will receive priority delivery status starting in 2028. Numerous projects are being developed and adapted for this auction, which is expected to be a turning point for the market. Lima anticipates the auction will be held in the first half of 2026. While the auction size is not yet public, it is expected to reach approximately 2 GW of power/8 GWh of energy storage capacity, which would double the current size of the Brazilian market.

 

Decarbonization policies in the Amazon region and the growth of data centers will also contribute to energy storage deployment. The Brazilian electricity regulatory agency, Aneel, is currently discussing time-of-use pricing in detail. If implemented with predictability and legal certainty, it could become a significant market driver, including promoting energy storage participation in residential electricity units. With appropriate incentives, reducing power outages could also become part of the revenue stream for energy storage systems. The feasibility of large-scale energy storage projects outside of capacity auctions depends on the clarity of other revenue sources. Energy storage projects typically generate revenue through a combination of fixed and variable income, while under the capacity auction model, projects only participate in the fixed income portion, leading to systems being almost entirely dedicated to the auction. Lima noted that the spirit of the new regulations is to allow energy storage to support new network connections and participate in more flexible competitive mechanisms, closer to demand response. Establishing a stable revenue base, coupled with reduced power curtailment, lower electricity costs, and other user service revenues, will facilitate "multi-service" projects. Some projects are being evaluated for potential adjustments, particularly at power plants experiencing significant power curtailment, but these are company-specific decisions. The ultimate goal is to create an environment for the independent development of energy storage, ensuring fair taxation and full participation in auction and competitive mechanisms. More broadly, the power sector still faces the growing challenge of system flexibility, and against the backdrop of delays in capacity auctions, new competitive mechanisms and solutions that encourage flexibility must be fostered to create space for the nationwide expansion of energy storage. This includes the adoption of advanced fire protection for battery energy storage systems, a critical component for safe, widespread deployment, which leading technology providers like BLOOPOWER integrate into their system designs.