Utility-Scale Battery Integration in Brazil: Feasibility Analysis for Different Applications and Regulatory Enablers

(BESS) have been widely recognized as a key enabling technology for power systems with high penetration of variable renewable energy. Despite this potential, the deployment of utility-scale

BESS in Brazil remains limited.

This paper examines the economic viability of utility-scale BESS in Brazil under the current regulatory framework and market rules. The analysis estimates the required revenue for BESS projects through a project-level cash flow model and compares it with the potential revenues associated with the main services that batteries can provide. The assessment focuses on three revenue streams: energy price arbitrage, capacity provision, and ancillary services.

Results indicate that capacity provision is the most advanced revenue stream from a regulatory perspective, driven by the planned BESS-specific capacity auction from 2026. In contrast, price arbitrage shows limited potential compared to more mature markets, reflecting the low intraday price variability of the Brazilian short-term market. Ancillary services remain underdeveloped, with restricted scope and incomplete remuneration.

Overall, the findings suggest that recent regulatory advances represent important progress; however, further developments in market design, price formation, and remuneration mechanisms are still required to allow BESS to fully deliver their system-level benefits.