The final version of the Ten-Year Energy Expansion Plan 2035 (PDE 2035), prepared by the Energy Research Company (EPE) under the coordination of the Ministry of Mines and Energy, treats storage as a necessary component for expanding and operating Brazil's power system. In the reference scenario, storage capacity begins to grow in 2028 and reaches 6.6 GW, or 19.6 GWh, in 2035. Over the same period, the total generation fleet rises from about 249 GW in 2025 to 359 GW, driven by solar, wind, distributed micro- and mini-generation and batteries. The analysis was published by ABSAE on July 20, 2026.
Why the plan bets on four-hour batteries
The 6.6 GW figure comes with an important caveat: it derives solely from the model that decides investments in centralized generation to cover capacity shortfalls. Distributed solutions, commercial and industrial uses, isolated systems and transmission and distribution applications were left out. In other words, the total market is likely to be larger than the figure suggests.
According to EPE, the growth of storage is explained mainly by the need to deal with surplus renewable generation and by the expected decline in technology costs. With more solar and wind in the mix, the system has excess energy during the day and a capacity shortfall in the early evening. In one of the simulations, oversupply occurs between 8 a.m. and 3 p.m., and the greatest generation need between 7 p.m. and 11 p.m.
To illustrate the role of batteries, the study modeled a 2,000 MW / 8,000 MWh system that charges during surplus periods and discharges when net load is highest. The result shows that equipment with a four-hour duration fits well with the needs profile identified by the planners.
Location, flexibility and procurement
PDE 2035 stresses that the value of a storage project depends on where it is connected. Transmission constraints and the availability of connection capacity directly influence each project's contribution. For this reason, the plan argues that procurement mechanisms should take electrical location into account, not just power and energy.
The document also acknowledges that the classic energy and capacity criteria no longer capture all of the system's needs. Meeting ramps and providing flexibility gain importance as net load becomes more variable. In its assessment of Law No. 15,269/2025, the plan indicates that reducing part of the mandatory thermal expansion could make expansion cheaper and increase the renewable share, but it reinforces demand for storage and other flexible resources, especially early in the horizon.
As a procurement route, the PDE cites the Capacity Reserve Auctions (LRCAP), in which the government contracts power availability to ensure supply security. The plan considers the first battery-focused auctions to be aligned with what planning indicates.
Behind-the-meter batteries
Another chapter examines use by residential, commercial and industrial consumers: shifting consumption away from peak hours, replacing diesel generators, increasing self-consumption of distributed generation and improving supply quality. For high-voltage customers, viability depends on the difference between peak and off-peak tariffs and on the load profile.
- 3 MWh commercial and industrial system: installed cost of around R$ 1,920/kWh, based on ABSAE data.
- Residential systems: about R$ 3,500/kWh, still too high for mass adoption.
- Potential cumulative investment in residential storage through 2035: between R$ 38 billion and R$ 200 billion, depending on cost declines and uptake by distributed generation owners.
ABSAE sees the plan as progress but points to the lack of economic and regulatory signals, which makes it difficult to project the market. The association advocates modernizing prices and tariffs, regulating storage in transmission and distribution and creating permanent procurement and remuneration mechanisms.
What changes in practice for the BESS sector
- Developers: prioritize four-hour projects and assess connection margin and transmission constraints early, since electrical location is expected to weigh in procurement.
- EPCs: build execution capacity for demand the plan projects from 2028 onward, tied to capacity auctions.
- Manufacturers and suppliers: track cost trends, which planners treat as a decisive factor, and also look at the commercial and industrial segment, where tariff differences can make projects viable.
- Everyone: monitor regulation on remuneration of attributes such as availability, duration, response speed and system services, which will define project revenue.
Original source: ABSAE — PDE 2035 PROJETA 6,6 GW DE ARMAZENAMENTO E REFORÇA PAPEL ESTRATÉGICO DAS BATERIAS NO BRASIL