The approval of Provisional Measure 1.304/2025 last Thursday (30) represented a milestone for the energy storage sector in Brazil. The final text, reported by Senator Eduardo Braga, included provisions that expand the integration of batteries into the electricity matrix, recognizing their relevance to the security, flexibility and efficiency of the system.
For Fábio Lima, executive director of ABSAE (Brazilian Association of Energy Storage Solutions), the outcome of the discussions in Congress is "a victory for the sector," even with points that still depend on regulation and improvement.
In an interview with Canal Regarding solar energy, the executive highlighted the inclusion of storage systems in REIDI (Special Incentive Regime for Infrastructure Development), the creation of a subclass with tax breaks of up to R$ 1 billion per fiscal year, and the recognition of the cross-cutting application of batteries, from generation to consumption.
According to him, although the MP While it still requires detailed analysis and complementary regulations, the legislative signal represents a decisive step towards consolidating energy storage as a key component of the energy transition and the modernization of the Brazilian electricity grid.
Fabio, from ABSAE's perspective, what is your assessment of the final text of Provisional Measure 1.304, especially regarding energy storage?
The rapporteur, Senator Eduardo Braga, demonstrated that he understood that the storage It plays a fundamental role in addressing the challenges facing the electricity sector today, in its various applications – from the consumer to large-scale generation. Overall, we consider this signal about the importance of energy storage to be quite positive.
The text is lengthy and has several interconnected points, so we are still delving into a detailed, point-by-point analysis with our associates regarding the devices with which we agree or disagree.
Analyzing the final text, two points stand out. The first is REIDI. Was the defined format adequate? And was the topic of local content, which was under discussion, ultimately removed?
ABSAE has always advocated for the inclusion of storage systems in REIDI, in its various forms. There are already ways for some applications to participate in the program as it exists today. REIDI is a suspension, with a zero-rate effect for PIS and COFINS, applicable to both the nationalization and importation of equipment from projects.
We understand that REIDI, a priori, does not have a direct relationship with national content. The current logic of the program is linked to the importance of the project as strategic infrastructure for the country. ABSAE is agnostic regarding import policies, incentives or disincentives for nationalization; to date, we have not worked with this agenda.
But was it important that there be no local content requirement at this time, to avoid additional costs?
We have partners at different levels of domestic manufacturing of storage systems, and others who work with imports. So we don't directly address this issue; the market already offers solutions at different stages of production.
Another point is the benefit of R$ 1 billion per fiscal year within REIDI, as a sub-limit. How will this work?
REIDI is a tax benefit that requires budgetary provision. The solution found was to create, in the PLV (Brazilian Tax Law), a subclass within REIDI specifically for storage systems.
This subcategory will have a tax waiver overseen by the Ministry of Mines and Energy, limited to R$ 1 billion per fiscal year between 2026 and 2030. This amount, however, will only be implemented if it is included in the Annual Budget Law. In other words, Congress will define the exact amount, up to the limit of R$ 1 billion, during the budget discussion.
Does the law begin to be enforced 90 days after its publication?
Article 24 defines the rules for the production of effects. In general, it comes into effect immediately upon publication, except for specified exceptions. The article dealing with REIDI (Special Regime for Infrastructure Development) comes into force upon publication of the law, but depends on regulation. The Executive Branch still needs to regulate this provision and ensure budgetary allocation.
If this regulation is not issued before the battery auction, could the agents benefit from REIDI?
There is no direct connection to the auction. ABSAE It understands that current legislation already allows the application of REIDI (Special Regime for Infrastructure Development) to storage projects, provided that adjustments are made to the regulations of the existing ordinances.
In any case, we believe that this regulation should be released before the auction takes place and before the winning entrepreneurs actually acquire the equipment.
In other words, agents could participate in the auction and then apply for the benefit once the regulations are released?
Yes. It's still speculation regarding the timeline, but it's possible to hold the auction independently of that device.
During the negotiations for the Provisional Measure, was there any point that ABSAE advocated for that ended up being left out?
ABSAE actively followed the debates surrounding this milestone in storage. Although it is not a legal milestone in the strict sense, there are important advances. Two points, however, deserve highlighting.
The first is the figure of the distributed energy resource aggregator, which would be a significant advancement. We understand that the next step in storage is at the consumer level, providing services to the system, including through aggregators, which would allow for greater control and dispatchability.
The second point is the definition of specific parameters for the tariffs for the use of the transmission and distribution system (TUST/TUSD). This responsibility was assigned to... ANEELWe trust in proper implementation, but it would be important for the legislation to already provide clearer guidelines, considering the benefits that storage brings to the network.
How would this aggregator work?
The distributed energy resource aggregator is a figure that already exists in several markets. It acts as an intermediary between the resources, usually installed in consumer units, and the system operator.
This allows, for example, several small battery systems to work together as a "virtual power plant," offering demand response, flexibility, or ancillary services to the electrical grid.
The bill also addresses how the storage will be used: whether at the generator, in transmission, or for consumption?
Yes. The Provisional Measure recognizes the cross-cutting nature of storage. It can be applied to transmission, distribution, generation, consumption, and even commercialization.
There are two main forms of application: centralized contracting through auctions – whether in transmission or generation, as a capacity reserve; or operation by the entrepreneur or consumer themselves, who can use storage for control, flexibility, dispatchability, reduction of generation cuts, and participation in competitive mechanisms.
Distributors can also use storage systems within their concessions when the investment is appropriate to local needs.
From the earliest versions of the Provisional Measure, this cross-cutting vision has been maintained, and the most relevant point is precisely the legal recognition of this characteristic. Storage is a multi-faceted asset that provides various services to the electrical system: it is present in capacity reserves, transmission, distribution, and consumption management. It is an essential tool for the flexibility and modernization of the system in the face of the expansion of distributed sources.
Can we say it was a victory for the sector?
Yes, it's a victory. The legislation is extensive and complex, still requiring detailed analysis, but the recognition of the importance of energy storage is undoubtedly a significant step forward for the electricity sector.
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