Will we have 296 GW participating in the capacity reserve auction?

Will we have 296 GW participating in the capacity reserve auction? The short answer is no. Looking at the physics of the grid and the rules of the auction, this number is likely to drop significantly by the day of the bidding.

The data released by EPE is impressive in its volume. There were 5.296 projects registered for the National Storage auction (2028 A), totaling 261,4 GW, and 5.734 for the Storage auction (2028 B), totaling 281 GW. As 4.939 projects sought registration in both products, we are left with 357 exclusive proposals in A and 795 in B. In total, there are 6.091 unique projects which, added together, exceed the intended 296 GW.

Current market readings indicate strong contracting in the National Storage product (2028 A), leaving a much more restricted remaining margin for Storage (2028 B).

Geographic distribution also plays a part in this story: 71,1% of all registered power is concentrated in the Northeast, a region with locational advantages but also with limitations in connectivity margins.

The remainder is divided between the Southeast (18,8%), South (5,1%), Midwest (3,4%), and North (1,6%) — where many developers sought to escape the transmission bottleneck in the Northeast in exchange for greater throughput, lower connection costs, and more attractive TUSTg.

This record volume reflects the fact that the registration phase did not require environmental licensing or project certification. But this mountain of gigawatts represents only the market's appetite. From here, a three-stage funnel comes into play.

The first filter is the flow margin, with detailed criteria in the ONS and EPE technical note [2]. For BESS, the calculation is not simple: it requires bidirectional analysis, considering both the network's capacity to receive battery discharge and to supply energy for charging.

With severe restrictions on physical availability in substations, static and dynamic performance, and short-circuit limits, the release of the remaining margin on September 28 should force the resizing—or abandonment—of many projects.

The second filter comes on November 17th, with the technical qualification of EPE, which will adopt a rigorous stance in the documentary analysis. As indicated in the official FAQ of the auction [3], the expectation is that EPE will prevent the physical overlap of projects in the same auction to avoid duplicate sales, demand strict compliance with the distance in relation to the Basic Network and DIT facilities in the Substation Development Area (ADS, according to REN nº 1.055/2022) and disqualify proposals with technical inconsistencies.

Brazil's first battery auction receives over 6 project entries.

The third filter is financial. The Public Notice No. 5/2026 of ANEEL [4] requires a Bid Guarantee of R$ 98.000,00 per megawatt installed. Although this amount may be adjusted during the Public Consultations ANEEL No. 022/2026 and No. 023/2026, a drastic decrease is not expected, in line with the recommendations of EPE itself [5].

Since a contribution lower than required disqualifies participation, this requirement eliminates speculative proposals and keeps in the competition only those with financial structure and technical expertise.

Given this scenario, the question remains for those who follow the sector: in your assessment, what will be the actual volume of power to be included in both auctions and, more importantly, what will be the volume effectively contracted at the end?

References:

[1] Energy Research Company (EPE). Registration Report: LRCAPs Storage 2026 — Guidelines and Project Registration.

[2] National Electric System Operator (ONS) and Energy Research Company (EPE). NT-ONS DPL 0057/2026 / EPE-DEE-RE-067/2026-r0 — LRCAP/2026 – National Storage and Storage: Methodology, Premises and Criteria for Defining the Remaining Capacity of the SIN for Flow through the Basic Network, DIT and ICG.

[3] Energy Research Company (EPE). FAQ Auctions (13/07/2026, Version 4) — LRCAP of 2026 – National Storage and Storage / MME Normative Ordinance No. 136/2026.

[4] National Electric Energy Agency (ANEELAuction Notice No. 5/2026ANEEL — Tender for contracting electrical power from Battery Energy Storage Systems with National Content (Public Consultation No. 022/2026).

[5] Energy Research Company (EPE). Official Letter No. 86/2026/PR/EPE — Contributions to the Auction referred to in MME Normative Ordinance No. 136/2026.

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.