SP & PT versions under construction
Brazil Regulation - linked to Article #4
Front-of-the-meter (FTM) & Behind-the-meter (BTM) ES
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Brazil holds an outstanding position in renewable energy, with wind & solar PV together accounting for about 26.4 % of total electricity generation in 2025, reflecting steady growth in both sources [EPE, 2026]. Solar PV in particular reached approximately 88.1 TWh of generation in 2025, and reached ~66 GW (CG+DG) of installed capacity in jun/2026, increasing significantly from the previous year. Renewables overall supplied ~84% of Brazil’s electricity mix (CG) in jun/2026, underscoring the country’s leadership in clean power [EPE, 2025].
However, regulatory and economic barriers still affect the deployment of BESS in Brazil. Although ANEEL has established rules for the colocation of energy storage systems with generating plants [18], the regulatory framework for broader front-of-the-meter (FTM) applications is still evolving. In addition, high implementation costs remain a significant barrier to the large-scale deployment of BESS in power grids.
Current regulation
Although Brazil has established an initial regulatory framework for energy storage, the use of BESS for several applications remains under development, particularly for the provision of ancillary services and T&D investment deferral. Meanwhile, the relatively high cost of BESS components, partly influenced by taxes and import duties, remains a significant barrier to storage projects [19]. Some behind-the-meter (BTM) BESS applications are already feasible: batteries can be legally deployed i) to reduce peak demand and ii) as backup systems to increase overall system uptime, directly meeting customers’ needs [20].
Brazil has taken a significant step toward integrating utility-scale BESS into its electricity market. In June 2026, the Ministry of Mines and Energy (MME) issued Normative Ordinance No. 136/2026, establishing the rules for two Capacity Reserve Auctions (LRCAP 2026 – Armazenamento, and LRCAP 2026 – Armazenamento Nacional), specifically designed to procure power from new battery energy storage systems. The auctions are intended to strengthen grid reliability and security of supply, with projects expected to begin operation in August 2028.
In addition, Law No. 15,269/2025 explicitly included energy storage projects within the scope of the REIDI infrastructure incentive regime, potentially improving project economics through tax benefits, subject to applicable eligibility requirements. The law also provides the legal basis for ANEEL’s regulation of electricity storage, further advanced by Normative Resolution No. 1,161/2026, which establishes authorization procedures for autonomous storage systems. Together, these measures pave the way for independent BESS operators and the potential to combine revenue streams from capacity provision, ancillary services, grid flexibility, and electricity trading, subject to the applicable regulatory and market rules.
Together, these measures represent important steps toward scaling up Brazil’s BESS market, although regulatory implementation and the development of additional revenue streams remain important factors for market growth.
BESS taxation & fiscal incentives in Brazil
Taxation remains a major cost factor for BESS deployment in Brazil. Imported systems and components are subject to import duties and other applicable federal and state taxes, including IPI, PIS/COFINS, and ICMS, depending on product classification and the transaction involved. Law No. 15,269/2025 extended the REIDI infrastructure incentive regime to energy storage projects, potentially suspending PIS/COFINS on eligible purchases and imports.
However, implementation uncertainties remain, including the annual fiscal-benefit cap of BRL 1 billion, eligibility requirements and the transition from PIS/COFINS to the new CBS tax from 2027. The law also authorizes the government to reduce import duties on BESS and their components to zero, but this requires implementing measures. Consequently, the effective tax burden remains dependent on equipment classification, project eligibility, and the applicable tax rules, affecting the competitiveness of battery storage in Brazil.
Brazilian lithium reserves - volumes pending update
As reported in Article #3, Brazil holds approximately 2% of global lithium reserves, according to the latest available data (USGS, 2026), The country is also home to Grota do Cirilo, operated by Sigma Lithium, one of the Americas’ leading hard-rock lithium operations. Sigma’s announced expansion plans include increasing annual production capacity to 580,000 tonnes of lithium oxide concentrate with its second processing plant, followed by a potential 830,000 tonnes per year with a third plant. These targets remain subject to project execution and ramp-up.
AMG’s Brazilian operations at the Mibra mine have an annual lithium concentrate capacity of approximately 130,000 tonnes. Combining this with Sigma’s planned 580,000-tonne capacity would bring the two companies’ nominal capacity to approximately 710,000 tonnes of lithium concentrate per year. Assuming typical lithium oxide grades of around 5% for Sigma’s concentrate and 6% for AMG’s spodumene concentrate, this could correspond to approximately 90,000 tonnes of lithium carbonate equivalent (LCE) annually. At an illustrative requirement of 40 kg of LCE per electric vehicle battery pack, this volume would be sufficient for approximately 2.3 million EVs per year. This is numerically comparable to Brazil’s total vehicle production in 2021, although the comparison is illustrative rather than a direct equivalence.
Companhia Brasileira de Lítio (CBL) is another established Brazilian producer, with an integrated operation encompassing lithium mining, concentrate production and chemical processing. Its chemical operations produce high-purity lithium compounds, including lithium carbonate. CBL has also announced plans to expand its concentrate and chemical-processing capacity. Meanwhile, Sigma Lithium and AMG have pursued their own downstream processing initiatives, reflecting opportunities to develop a more integrated domestic lithium value chain. Further details on Brazil’s lithium industry are available in Article #3.
References
[18] https://canalsolar.com.br/usinas-hibridas-sao-regulamentadas-pela-aneel/
[22] https://www.researchgate.net/publication/358743029_IRENA_Critical_materials_Lithium_2022