The Brazilian Association of Energy Storage Solutions (Absae) and the Brazilian Solar Photovoltaic Energy Association (Absolar) issued a joint statement, released by Absae on February 20, 2026, on the new ceiling prices for the Capacity Reserve Auction (LRCAP) announced by the Ministry of Mines and Energy (MME). In the view of both organizations, the revision of the economic parameters applied to thermal and hydroelectric plants brings the values closer to the actual cost of providing capacity services and, as a result, opens room for battery energy storage systems to compete in the auction on competitive terms.
What changed in the LRCAP ceiling prices
The LRCAP is the mechanism the government uses to contract power that remains available to the electricity system at times of greatest need, ensuring supply reliability. The ceiling price is the maximum value participants can bid and, in practice, determines which technologies can enter the competition with economic viability.
According to the statement, the MME's update to the parameters for thermal and hydroelectric plants more accurately reflects how much it truly costs to deliver capacity to the system. For the associations, this adjustment has a significant indirect effect: by better reflecting the cost reality of conventional sources, the new ceilings become compatible with batteries offering the same service, either as an equivalent alternative or as a complement to other sources.
The condition set by the associations: equal treatment in contracting
The core point of the document is that storage competitiveness depends on more than price. Absae and Absolar stress that the announced values only serve this purpose if there are equal contracting conditions across technologies. In other words, the auction rules must treat batteries, thermal plants and hydroelectric plants equivalently when they all deliver the same product: capacity available to the system.
Along these lines, the organizations reaffirm their support for technology neutrality in power sector auctions. The principle is simple: the auction should contract the required service at the best cost, without favoring a specific source in advance through requirements or criteria designed around a single technology.
Arguments in favor of storage
The statement presents battery energy storage (BESS) as a solution capable of combining three attributes at once:
- Energy security, by providing available power to serve the system when needed;
- Speed of deployment, a feature that sets these projects apart from larger developments with longer construction times;
- Economic efficiency, with the potential to help reduce sector charges and thus protect the end consumer.
The argument about charges is especially relevant because the costs of contracting capacity reserve are shared among consumers. A broader competition, with more technologies able to compete, tends to push prices down.
What changes in practice for the BESS market
For those working in the storage value chain in Brazil, the associations' reading is that there is real economic room for batteries in the LRCAP. Practical implications include:
- Developers: the ceiling prices now accommodate competitive BESS bids, which justifies moving ahead with project structuring and preparing documentation for the auction, while closely following the final wording of the contracting rules.
- EPCs: speed of deployment, highlighted in the statement as a differentiator, makes meeting schedules a competitive factor, and engineering firms must demonstrate the ability to execute on time.
- Manufacturers and suppliers: a ceiling compatible with the technology signals potential demand, requiring consistent commercial proposals so developers can set prices within the auction limits.
The warning, however, remains: the attractiveness pointed out by the organizations is conditional on equal treatment. Without equivalent rules for batteries and conventional sources, an adequate ceiling price may not translate into contracts. Monitoring the definition of the auction conditions is therefore as important as analyzing the values published by the MME.
Original source: ABSAE — Absae e Absolar lançam nota conjunta sobre preços-teto do LRCAP e competitividade do armazenamento