Brazilian energy storage regulation due this year, regulator official says

In a public hearing held by the Chamber of Deputies’ Mines and Energy Committee, ANEEL director Daniel Danna, said the regulator intends to publish the first rules for energy storage this year. The initial standards will deal with access to, and use of the grid network, and remuneration for energy storage, including revenue stacking.

“The cycle we are in now involved the production of a regulatory-impact analysis and the proposed normative resolution that we will now approve, still in the second half of the year,” said Danna. He added the rules would also address “future situations such as [grid] capacity auctions and isolated-system auctions.”

A second round of discussions, after the results of CP 39 are approved, will focus on the regulatory treatment of “reversible” plants, energy storage systems as assets of the electricity transmission and distribution system, and the regulatory treatment of energy storage systems for mitigating curtailment and constrained-off electricity. A planned third round will discuss energy storage as a service aggregator and simulations. Those rounds of discussion are expected to be completed by 2028.

Danna highlighted the impact of budget cuts by regulatory agencies on the process of discussing and evaluating energy storage regulation.

The parliamentary hearing focused on the need for energy storage to address the challenges posed by the growing share of renewable energy sources, especially solar and wind, in the Brazilian grid. Their rapid growth, which is exceeding electricity demand and transmission capacity, has led to significant cuts in power generation and has created operational challenges for the National System Operator (ONS). This is particularly evident during periods of high solar generation – around midday – and peak demand, at night. Brazil’s 103 GW of hydroelectric generation capacity – which represents more than half the nation’s energy fleet – cannot effectively respond to the current rapid fluctuations in flows of renewable energy production and peak grid electricity demand.

Christiany Salgado Faria, director of Planning and Grants for Electric Power Generation at the Ministry of Mines and Energy (MME), highlighted the need, foreseen in the Plano Decenal de Expansão de Energia 2034, for 5.5 GW of additional power generation capacity in 2028, to meet the supply requirements of the Brazilian electrical system. That figure will need to reach more than 35 GW by 2034, she said during the debate.

From last year to 2034, hydro’s share of the Brazilian generation fleet should fall 10%, to 36%. The share of renewables is set to rise, with distributed clean energy generation – mostly solar – to rise from 13% to 18%, and centralized solar and wind power to rise from 21% to 24%.

“That is why we need to discuss [energy] storage, to address these power and operational flexibility needs, given this context,” said Salgado Faria. “The public policy being developed and formulated, with emphasis on the [energy] storage auction, was put out for public consultation by the Ministry of Mines and Energy, bringing some guidelines. It is important to emphasize that we have not yet published the final guidelines, which are still under discussion,” added the director, mentioning CP 176, of 2024.

In the CP, the MME indicated energy storage auction contracts would last 10 years, with supply starting on July 1, 2029 and providing four hours of daily dispatch under the command of the ONS, with remuneration for fixed revenue adjusted by the Índice Nacional de Preços ao Consumidor Amplo.

The president of the Brazilian Association of Photovoltaic Solar Energy, Rodrigo Sauaia, reiterated concern about the delay in holding a capacity reserve auction for which batteries will be eligible.

“We recently saw a legal dispute that delayed the auction of thermoelectric and hydroelectric capacity reserves,” Sauaia told committee chair Congressman Diego Andrade. “And our concern, Mr. President, is that the batteries not be left for later because we have seen some talk that the battery auction will only take place after the thermoelectric and hydroelectric auction. Why, if this technology is already mature and ready to be used? So in this sense, we ask that the Ministry of Mines and Energy, and here the National Congress, do not postpone the implementation of this battery auction. This could be a major achievement by Brazil in the year of COP 30: The country’s first battery auction, showing that Brazil is serious when it talks about the use of this technology.”

From pv magazine Brasil.