On 28 July 2026, the Brazilian Electric Energy Agency (“ANEEL”) approved the opening of public consultations on the draft tender notices for Auctions No. 5/2026 and No. 6/2026, both aimed at the contracting of power capacity from new Battery Energy Storage Systems (“BESS”) (the “Storage LRCAP”). The auction represents a milestone for the sector: it is the first capacity reserve contracting structured specifically for this technology in the National Interconnected Grid (“SIN”).
Both auctions were structured on the basis of the guidelines of the Ministry of Mines and Energy (“MME”) set out in Ordinance No. 136/2026, with the objective of contracting power availability expressed in MW, with a scheduled supply commencement date of August 1, 2028 and a contractual term of 15 years. The Storage LRCAP sessions will take place in December 2026: on December 2, Auction No. 5/2026 will be held, aimed at the product subject to minimum national content requirements; and on December 4, Auction No. 6/2026, open to eligible systems without the national content requirement.
The two tender notices share a similar structure with regard to the technical, contractual and financial requirements applicable to the contracting of power capacity through batteries, but differ in terms of the national content requirement: whilst Auction No. 5/2026 requires proof of accreditation under the Brazilian Economic and Social Development Bank (“BNDES”) CFI System, Auction No. 6/2026 waives this requirement.
Key Terms of the Storage LRCAP
In the first instance, the contracting will be formalised by means of a Power Capacity Reserve Contract (“CRCAP”), entered into between the winning sellers and the Energy Trading Chamber (“CCEE”), which will act as representative of the generation agents. The seller will be remunerated through fixed annual revenue, paid in monthly instalments, and the contracted obligation corresponds to the availability of power for centralised dispatch by the National Grid Operator (“ONS”),.
To participate, projects must be classified as autonomous BESS, with their own authorisation, connection and metering — which excludes co-located systems from the competitive process. Subsequent association with generation facilities is only permitted where it does not prejudice the dispatch of the BESS or conflict with existing regulated contracts already in force, such as the Power Purchase Agreement in the Regulated Market (“CCEAR”), the Reserve Energy Agreement (“CER”), Distributed Generation (“DG”), the CRCAP itself, or the Alternative Energy Sources Incentive Programme (“Proinfa”).
Technical Requirements: Focus on Reliability and Systemic Operation
On the technical front, the technical qualification of projects (prior to the holding of the Auction) is subject to compliance with a series of minimum requirements:
(i) a minimum power capacity of 30 MW;
(ii) the capacity for continuous operation for 4 consecutive hours;
(iii) a minimum total efficiency of 85%;
(iv) full recharging within a maximum of 6 hours;
(v) and a Unit Variable Cost (“CVU”) equal to zero.
In addition, projects must comply with the technical connection requirements defined jointly by the ONS and the Energy Research Company (“EPE”), the most notable of which include:
(i) grid-forming functionalities;
(ii) dynamic active and reactive power response;
(iii) voltage and frequency control;
(iv) resilience to systemic events; and
(v) the capacity for coordinated operation with other electronic equipment connected in the same electrical vicinity.
The tender notices also require that the storage units be new: the battery cells and bidirectional inverters or converters must not have been subject to prior commercial use, reconditioning, remanufacturing or reuse. The reuse of existing civil installations and auxiliary or transmission equipment, however, remains permitted, which is favorable to projects associated with assets already connected to the SIN.
National Content: The Distinguishing Feature of Auction No. 5/2026
Auction No. 5/2026 merits particular attention: it was specifically designed for the contracting of power capacity subject to compliance with the national content requirements applicable to stationary battery storage systems under the BNDES CFI System. In practice, these requirements impose that a minimum share of the components and equipment of the storage system — such as battery cells, bidirectional inverters or converters and other items of the project — be manufactured or supplied by the domestic industry, with the BNDES itself responsible for certifying compliance with these local content criteria.
The corresponding proof of compliance must be provided prior to the signing of the CRCAP and will be required again at the implementation stage, as a condition for the commencement of commercial operations.
Guarantees and Qualification
Another relevant point for interested parties is the value of the guarantees required: the Bid Bond was set at R$ 98,000.00 per MW of installed capacity, and the Performance Bond — a condition for the issuance of the authorisation and the signing of the CRCAP — corresponds to R$ 980,000.00 per MW. Proof of minimum net equity at the same level as the Performance Bond is also required.
Corporate Governance and Restrictions on the Transfer of Control
From a corporate standpoint, the tender notices also introduce relevant governance rules. The participation of consortia formed by companies that maintain amongst themselves a relationship of controller, controlled entity or subsidiary — even if indirectly — will not be permitted.
Furthermore, in a manner similar to transmission auctions, following the issuance of the authorisation, the transfer of corporate control of the authorised entity will be prohibited until the commencement of commercial operations, save for specific circumstances, such as privatisation, substitution in the interests of the adequate provision of the service, and reorganisation within the same economic group without any change in indirect control.
Cost Allocation Among Generators and Risk Allocation
Furthermore, pursuant to Federal Law No. 10,848/2004, as amended by Federal Law No. 15,269/2025, the costs of the capacity reserve contracted through storage systems will be apportioned exclusively among generation agents, in the manner to be regulated by ANEEL,. As the apportionment criterion is still subject to regulation, the receivables structure of the sellers remains a point of attention for project pricing.
Penalties and Implementation Risks
Finally, the penalty regime is also stringent. During the bidding phase, failure to comply with obligations may give rise to a fine of R$ 40,000.00 per MW, in addition to the enforcement of the Bid Bond; during the implementation phase, an unjustified delay of more than 90 days in the commencement of commercial operations may result in a fine of between 50% and 100% of the Performance Bond, and total or partial non-performance of the authorisation may lead to a fine of up to 200% of the same bond, without prejudice to the revocation of the authorisation and the termination of the CRCAP.
Next Steps
In light of this set of requirements, Public Consultations No. 22 and No. 23, which run from 30 July to 14 September 2026, open a strategic window for agents interested in developing, financing, supplying equipment for or structuring storage projects in Brazil. The tender notices present, however, significant challenges in terms of technical qualification, corporate structure, financial guarantees, national content, connection and contractual risk allocation, all of which should be mapped out from the outset by those intending to develop storage system projects and wishing to participate in the auctions.