On February 13, 2026, at the request of the Ministry of Mines and Energy (MME), ANEEL published the price caps for the 2026 Capacity Reserve Auction (LRCAP-2026). On the same day, the Brazilian Association of Energy Storage Solutions (ABSAE) released estimates according to which battery energy storage systems (BESS) could provide the same type of service at a much lower cost, saving more than R$3 billion a year in charges paid by consumers.
The price caps set for LRCAP-2026
The LRCAP is the mechanism through which the government contracts available capacity to ensure demand is met at critical times. Generators receive a fixed annual revenue per megawatt made available, funded by a charge shared among system users. For this edition, the caps were set as follows:
- Hydropower plants: R$1.4 million/MW.year
- Existing thermal plants: R$2.25 million/MW.year
- New thermal plants: R$2.9 million/MW.year
ABSAE's numbers for batteries
The association relies on an August 2025 study by Aurora Research, which indicates that a fixed revenue of around R$1.25 million/MW.year would be enough to make BESS projects viable. This figure, however, assumes three conditions: 15-year contracts, access to REIDI (a special regime that exempts infrastructure investments from certain taxes) and no double charging for grid use.
According to ABSAE, this level would already be 25% below the cap initially suggested by the MME for new thermal plants. With the values now made official, the association calculates that contracting 2 GW of batteries, the volume mentioned by the ministry, could reduce charges by R$3.2 billion a year, a figure higher than this year's planned budget for the Luz para Todos program, of R$2.6 billion.
The association adds two operational advantages. Unlike thermal plants, which incur extra costs every time they are dispatched, batteries have no variable dispatch cost. In addition, they can absorb renewable energy that would otherwise be wasted, helping to reduce curtailment, which exceeded 20% last year.
Complementary profiles and the storage auction
ABSAE does not advocate replacing thermal plants, but rather a division of roles. Batteries are suited to daily cycles of up to 4 hours, precisely the profile required to cover the capacity shortfall during the evening peak. Thermal plants, on the other hand, are better suited to prolonged stress situations, such as years of unfavorable hydrology. The argument is that the country needs a combination of sources that addresses different risks at the lowest total cost.
In this context, the association praised the announcement by the MME and the CMSE of an LRCAP dedicated to storage by June. For the competition to be balanced, it calls for:
- A contracted volume above 2 GW, preventing the system's needs from being used up by the year's first auctions;
- A review of the allocation of the ERCAP, the capacity reserve charge, with equal treatment across resources and cost sharing among the users who benefit from the service;
- Completion of ANEEL's basic regulation of storage, with a balanced grid use tariff and no double charging on BESS;
- Regulation of REIDI for storage, bringing its tax treatment in line with that of other structural technologies.
What changes in practice for the BESS supply chain
For developers, the R$1.25 million/MW.year figure serves as a competitiveness benchmark when preparing bids for the storage auction. But this benchmark only holds if the four pending regulatory issues are resolved; without REIDI, 15-year contracts and an end to the double grid tariff, financial models need alternative scenarios.
For EPCs, the deadline of June is tight and requires projects with well-defined engineering, grid connection and schedules starting now. Manufacturers and suppliers of batteries, inverters and control systems should keep an eye on the volume to be contracted: above 2 GW, demand for equipment grows significantly. The moment calls for close monitoring of ANEEL and MME decisions in the coming weeks, as they will determine whether the savings projected by ABSAE turn into contracts.
Original source: ABSAE — Baterias podem gerar economia superior a R$ 3 bilhões por ano no Leilão de Reserva de Capacidade, segundo estimativas da ABSAE