Deloitte sees $11.1 billion opportunity for Brazilian storage market

Brazil’s emerging energy storage market could generate more than BRL 57 billion ($11.1 billion) in investment between 2026 and 2035, according to Deloitte, which based its forecast on expected battery procurement volumes and government expansion plans.

The consultancy’s estimate, published in its “Energy Storage Systems: Challenges, Opportunities and Prospects for Brazil’s Power Sector” report, assumes an initial requirement of about 1.7 GW in Brazil’s first capacity auction for battery energy storage systems and annual auctions through 2035. Deloitte said the projection also incorporates expected growth in installed storage capacity, future capacity procurement needs, and its own market outlook metrics.

According to projections from Brazil’s Energy Research Office (EPE), the country could add about 7 GW of energy storage capacity and a further 3 GW of demand-response resources by 2035.

Earlier this month, Brazil’s Ministry of Mines and Energy published guidelines for two energy storage auctions scheduled for December. The tenders aim to procure capacity from new electrochemical battery storage systems and are expected to play a central role in developing the country’s storage market.

Deloitte said the auctions come as Brazil’s power sector adapts to rising shares of solar and wind generation, increasing the need for resources that can supply electricity during periods of peak demand or lower renewable output.

Jovanio Santos, director of strategy and transactions for Deloitte’s power and utilities practice, said energy storage systems provide flexibility, reliability, and resilience to electricity networks while helping integrate larger volumes of renewable generation. He said storage assets can also offer investors more predictable revenue streams and reduce exposure to electricity price volatility.

The consultancy noted that global battery storage capacity expanded from about 1 GW in 2013 to more than 85 GW in 2023, citing data from the International Energy Agency (IEA). China, Europe, and the United States accounted for about 90% of newly installed capacity during that period.

Brazil has also advanced its regulatory framework for storage. In June, the National Electric Energy Agency (ANEEL) published regulations covering permitting, business models, remuneration, revenue stacking, grid access, and tariff treatment for energy storage systems.

The regulation allows storage projects to provide ancillary services and earn revenue from multiple services, a provision widely viewed as important for project economics. Deloitte said previous regulatory gaps had limited market development by restricting revenue opportunities and applying rules designed for conventional generation assets.

The report concludes that further development of ancillary services markets and well-designed market products will be critical to attracting investment and supporting viable business models. Santos said companies seeking to participate in the sector should begin developing project pipelines, evaluating technologies including BESS, pumped-storage hydropower, and hybrid systems, and establishing business models that combine capacity payments, energy arbitrage, and ancillary service revenues.

From pv magazine Brazil