In the week of July 16, 2026, five of the leading associations in Brazil's power sector released a joint statement supporting Bill 3,716/2026. The proposal changes the rule that currently assigns to generators alone the payment for contracting capacity from battery energy storage systems (BESS). The document is signed by ABSOLAR, ABEEólica, ABSAE, ABIAPE and APINE. The position was republished by ABSOLAR on July 20 and comes on the eve of the first Capacity Reserve Auction (LRCAP) focused on storage.
What the current rule says and why it is disputed
Under current legislation, the cost of contracted battery capacity falls only on those who generate power. The associations point to a mismatch in this design: the benefits of storage are not limited to generators but spread across the entire National Interconnected System (SIN). Batteries can, in general, store energy during periods of surplus and release it when demand rises, helping to add flexibility to the grid. If the gain is collective, the associations argue, the bill should not be concentrated on a single group of market players.
In the industry's view, this means solar and wind plants end up carrying a burden that, in practice, serves the power system as a whole. Bill 3,716/2026 is seen as the instrument to correct this asymmetry before it becomes locked into contracts.
The three core arguments of the joint statement
The associations' text organizes its criticism around three points:
- Technological neutrality: the rule would treat unequally sources that should compete on equivalent terms, penalizing utility-scale solar and wind generation.
- Competitive distortion: by imposing an extra cost on some players, the rule would alter the balance among market participants.
- Legal uncertainty: the lack of clarity over who pays for contracted capacity could affect investor confidence precisely in the first storage LRCAP.
Why the issue matters for the first storage LRCAP
The LRCAP is the auction format in which the government contracts available power capacity to ensure demand is met, not just energy. An auction dedicated to batteries marks the formal entry of storage into this mechanism in Brazil. As a debut, clear rules on cost allocation carry extra weight: they influence project pricing, financial modeling and investors' willingness to participate. The associations' concern is that the current rule will make projects more expensive and end up undermining the auction itself.
What changes in practice for BESS players
Until Bill 3,716/2026 is voted on, the storage supply chain lives with an open regulatory variable. Some practical effects deserve attention:
- Developers: should consider alternative cost-allocation scenarios in feasibility studies and follow the bill's progress, since the outcome may change revenue and expense assumptions.
- EPCs: the regulatory definition tends to influence the pace of investment decisions and, consequently, the timeline for contracting engineering and construction.
- BESS manufacturers and suppliers: greater legal certainty usually favors auction participation and equipment demand; continued uncertainty may delay commitments.
- Solar and wind generators: they are the most directly affected by the current rule and have an interest in mapping the impact of the capacity cost on their assets.
For those planning storage projects, the moment calls for close monitoring of the legislative debate and flexibility in structuring bids, so that any changes to the law can be incorporated without rework on the eve of the auction.
Original source: ABSOLAR — Associações defendem mudança na lei para evitar custo extra à geração solar e eólica em leilão de baterias