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The Brazilian electricity sector is undergoing a profound transformation, driven by the expansion of solar and wind power. While these sources offer environmental and strategic benefits, their intermittent nature poses significant challenges to the stability of the electrical system.
While the Brazilian National Interconnected System (SIN) faces technical and regulatory deficiencies, technological solutions such as smart grids and battery energy storage systems (BESS) are emerging as essential tools to ensure greater reliability, flexibility, and security of the electricity supply.
In this context, swift and coordinated regulatory action will be crucial to enabling the integration of these solutions and consolidating the progress of the energy transition in Brazil.
Thanks to its continental size and abundance of natural resources, Brazil has consolidated over the decades a predominantly renewable electricity matrix, based mainly on hydroelectric power. In recent years, however, the country has stood out as one of the global leaders in solar power generation. By 2025, solar energy will surpass 60 GW of installed capacity, reaching 23,5% of the national electricity matrix and becoming the second largest source of generation in the country.
Projections indicate that, by 2031, combined solar and wind power could represent about 47% of Brazil's electricity matrix — a remarkable transformation compared to 2002, when hydroelectric power accounted for almost 90% of generation and other renewable sources still had an incipient presence.
However, the rapid growth of intermittent renewable sources – especially solar energy – brings with it new challenges. The variability inherent in these sources, coupled with the absence of centralized dispatch by the National System Operator (ONS), has resulted in overloads and generation cuts (curtailment) in the National Interconnected System (SIN).
Given this scenario, a question arises: is it possible to expand the Brazilian electrical system reliably and resiliently in the coming years using intermittent renewable sources?
In this new technological paradigm, smart grids and energy storage systems emerge as fundamental solutions, along with the development of an appropriate regulatory framework.
Smart grids utilize advanced technologies and bidirectional communication to efficiently manage energy supply and demand. These networks incorporate two main sets of functionalities:
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Real-time visibility
Through smart meters, distributed sensors, and advanced supervisory control and data acquisition (SCADA) systems, it is possible to continuously monitor network conditions, ensuring precise control of parameters such as voltage, frequency, and energy flows. -
Decentralized and active control
Dispatch algorithms, demand response programs, and automatic reconfiguration mechanisms allow consumers, distributed generators, and microgrids to act as balancing agents, mitigating fluctuations resulting from the intermittency of renewable sources.
Applying intelligence to electrical grids also promotes the reduction of technical losses, the rapid isolation of sections affected by contingencies, and more efficient coordination of protection systems.
With regard to energy storage, according to the PDE 2034 (Ten-Year Energy Expansion Plan 2034), published by EPE (Energy Research Company) — the entity responsible for conducting studies and research to support the planning of the energy sector in Brazil — the current scenario points to a business environment that is increasingly favorable to the development and adoption of storage technologies.
Within this context, battery energy storage systems (BESS) emerge as a strategic asset to solve the Brazilian energy paradox: vast renewable potential, but limited dispatchability.
Battery energy storage systems (BESS) offer a technological path to balance supply and demand, ensuring a constant and reliable energy flow. They store surplus generation during periods of high production and release it during peak consumption times.
The EPE study highlights the versatility of BESS systems and their wide range of applications. These systems can act as a load, generator, or provider of high value-added services. Some examples include frequency regulation, load shifting, and spinning reserve for voltage stability support.
In practice, these batteries allow for the storage of abundant and low-cost solar energy during peak irradiance hours, making it available in the late afternoon and evening, thus reducing the need to activate gas-fired thermal power plants.
In this scenario, the battery energy storage system (BESS) market in Brazil has high expansion potential, driven by the rapid integration of renewable sources, the demand for a more resilient electrical infrastructure, and the growing relevance of energy security as a strategic pillar for the development of the national electricity sector.
International experience demonstrates that battery energy storage systems (BESS) can be a viable solution. In California, for example, in response to a serious imbalance between supply and demand, the state implemented an aggressive policy to encourage the use of BESS, which today totals approximately 10 GW of installed capacity.
In Australia, following a major blackout, a power reserve program with 150 MW of battery capacity was launched in 2017, and the investments were quickly recouped due to the strategic value of the technology.
The integration of BESS — especially in residential storage systems — has also played a key role in the energy transition and decentralization of electricity grids in Germany.
For Brazil, the integration of BESS (Built-in Systems) into the National Interconnected System represents a strategic opportunity to mitigate the intermittency of renewable sources and strengthen the reliability of the system, as well as increase the flexibility and efficiency of the grid as a whole.
Nevertheless, the widespread adoption of smart grids and BESS in the country still faces some economic, technical, and regulatory barriers. The capital cost of batteries, although decreasing, still represents a significant investment, especially for long-duration storage systems, which are better suited to seasonal variations in wind and solar availability.
Furthermore, the operational characteristics of a highly centralized, continent-sized system—with over 180 km of transmission lines—require appropriate regulatory innovations to enable the consistent and high-quality deployment of BESS systems.
In the case of smart grids, the main challenges include cybersecurity and data protection risks, high initial costs, the need to modernize infrastructure, a lack of consumer knowledge, and the demand for technologies that ensure interoperability between different systems and platforms across the vast national territory.
In this context, it is evident that technology alone is not sufficient to drive the energy transition. The effective implementation of smart grids and BESS (Build-Storage Systems) must integrate a holistic and coordinated approach that combines integrated grid planning, technological diversification, and strategic regulatory reforms, capable of creating an environment conducive to innovation and sustainable modernization of the Brazilian electricity sector.
Brazil recently began improving regulations for energy storage. Resolution No. 1.000/2021 of ANEEL Module 3 of the Distribution Procedures (PRODIST) authorizes the connection of battery storage systems in consumer units, and energy storage associated with micro and mini-distributed generation of up to 3 MW is already authorized in the country by Law No. 14.300/2022.
Furthermore, ANEEL The Agency launched Public Consultation No. 39/2023 to gather contributions from society on improving the Brazilian regulatory framework applicable to electricity storage. This consultation marks the first cycle of debates that the Agency intends to hold on the subject in the coming years.
Based on the results of the Public Consultation, several regulatory improvements were recommended for implementation, including:
- Definition of a granting model for independent (standalone) BESS systems and incorporation of its granting requirements into the normative resolution of ANEEL which already regulates the authorization of wind, solar, thermal, and other types of power plants;
- Regulation of requests for changes to the technical characteristics of BESS (Building System for Electronic Equipment and Services);
- Updating transmission regulations to encompass the integration of BESS (Basic Energy Services) into the system, including connection requirements, contracting procedures, and billing rules for the use of the distribution system, as well as the inclusion of independent BESS as reversible energy users and the enabling of their individual metering.
In parallel with regulatory development, on September 27, 2024, the Ministry of Mines and Energy (MME) launched Public Consultation No. 176 with the objective of establishing guidelines for the 2025 Power Capacity Reserve Auction (LRCAP 2025). The main innovation of LRCAP 2025 is the contracting of energy storage systems through batteries.
Within the scope of the public consultation conducted by the MME for the LRCAP 2025, institutional perceptions regarding the inclusion of batteries in the auction indicated that the instantaneous response capacity, as well as the operational and locational flexibility of battery-based energy storage systems (BESS), makes them potential solutions for various applications in the Brazilian electricity sector, including meeting peak demand.
At the same time, regulatory challenges have been identified that still need to be overcome to consolidate this energy source.
According to the technical guidelines published in LRCAP 2025, the risk associated with the uncertainty of ONS dispatch orders would be the responsibility of the developer, encompassing factors such as the number of starts and shutdowns, operating hours, and total energy delivered.
Furthermore, entrepreneurs would be entitled to a Fixed Annual Revenue, in R$/year, to be paid in twelve monthly installments, which could be reduced according to the operational performance evaluation of previous months. This evaluation would be carried out monthly, taking into account the effective availability, and the corresponding terms would be subject to future regulation by [the relevant authority/entity]. ANEEL.
However, the LRCAP 2025 auction was cancelled due to legal disputes related to the criteria adopted for evaluating the availability of thermoelectric capacity, which, according to the Ministry of Mines and Energy (MME), made it impossible to continue the auction.
The Ministry also reported that a new public consultation is expected to be launched by the end of the year for an auction focused on batteries, scheduled for 2026. This event should mark an important step towards the integration of BESS systems in Brazil.
With regard to smart grids, the ANEEL It has encouraged its adoption through regulations such as Normative Resolution No. 966/2021 and MME Ordinance No. 111/2025, which establishes general guidelines to promote the gradual digitization of low-voltage electricity distribution networks and services.
In this context, the adoption of smart meters by some distributors, such as COPEL, is observed, whose system allows monitoring of the quality of energy supply based on parameters such as voltage, current and power.
In short, Brazil is at a crucial moment in its energy transition. The integration of smart grids, BESS (Build-Storage Systems), and regulatory innovation is not just a technological challenge, but a comprehensive transformation that requires coordinated action across regulatory, institutional, and industrial spheres.
By moving forward in defining clear rules, establishing effective price signals, and promoting targeted initiatives, the country can unlock the full potential of its renewable resources, while ensuring reliability and resilience in the electricity system.
To keep pace with the global rhythm, the country will need to adapt its regulatory and operational framework, making it more flexible, intelligent, and decentralized.
For this to happen, it is essential that the entire decision-making chain — regulators, legislators, and sector agents — mobilize in a coordinated and urgent manner, ensuring that Brazil advances at the necessary pace towards a safer, cleaner, and more innovative energy matrix.
Ultimately, smart grids, battery storage systems (BESS), and regulatory innovation together form the basis of a modern, reliable, and resilient electricity system.
When combined with diversification and decentralized management, these solutions will allow Brazil to advance its energy transition without compromising the quality or continuity of supply—essential factors for economic and social well-being.
To ensure the effective integration of these solutions into the Brazilian electrical system, it is necessary to make progress on several regulatory and institutional fronts, including the development of clear and precise standards, the definition of price signaling criteria, and the implementation of specific initiatives to incentivize these technologies (such as LRCAP).
The path forward will require adaptability, collaboration, and a commitment to modernization. If these efforts are successful, Brazil will not only ensure a secure and reliable supply of electricity for its population, but will also reinforce its leadership position in the global movement towards a sustainable and innovative energy future.
The opinions and information expressed are the sole responsibility of the author and do not necessarily represent the official position of the author. Canal Solar.
