The auction aims to boost Brazil’s grid reliability by integrating energy storage for wind and solar power.

Brazil is set to conduct its first auction for adding batteries and storage systems to the national power grid.

The auction, to take place in June 2025, will include 300MW energy capacity purchase that could drive an estimated $450m in investments from winning bidders, according to consultants Oliver Wyman.

The company noted that operational batteries and storage systems could have cut the use of fossil fuels in thermoelectric plants by 21% from April to December 2024.

The auction’s terms propose ten-year contracts from July 2029, with the systems mandated to provide maximum power availability for four hours daily at a fixed price.

Interest in the auction has been expressed by power companies such as Portugal’s EDP and Brazil’s ISA Energia.

The auction will enhance Brazil’s power grid reliability by integrating energy storage solutions for electricity generated from renewable sources such as wind and solar.

Brazil typically conducts auctions to secure power capacity for periods when demand peaks but supply diminishes, such as late afternoons – a time when solar power production declines.

The June 2025 auction, exclusively for batteries and storage systems, is the first time the government allows such technologies to participate.

Oliver Wyman’s engagement manager for energy and natural resources Rodrigo Borges told Reuters that the estimated investments required could still change depending on details which have not yet been made public.

The development aligns with the climate action plans of the UK and Brazil, both G20 nations, as they seek to reconcile their economic and public interests with enhanced climate commitments in their nationally determined contributions 3.0.