In a three-month period, the Minister of Mines and Energy, Alexandre Silveira, presented two versions on the participation of energy storage in the Capacity Reserve Auction.
On March 21, in Houston, USA, he signaled that he would include the technology in the contest, but in June he backtracked, declaring that the solution still presents challenges technological and regulatory. However, experts consulted by Canal Solar vehemently dispute the minister's position.
For Silvia Wada, Executive Director of Finance and Investor Relations at ISA CTEEP, battery systems (Battery Energy Storage System – BESS) are a mature and reliable technology, already used to meet the systemic needs of countries such as the United States, Australia, England and Italy.
“In fact, as recognized by the MME, during a workshop held on May 24, the coupled (hybrid) or decoupled (stand-alone) BESS of non-controllable renewable generation presents technical attributes that complement other technological alternatives (thermal and hydroelectric plants) present in the initial public consultation of the LRCAP (Capacity Reserve Auction in the form of Power) guidelines of 2024”, said Wada.
On March 8, the MME opened the Public Consultation nº 160 to discuss the LRCAP guidelines. The consultation, which was supposed to end on March 28, had its deadline extended until April 26. Since then, the market has been waiting for the results of the contributions. The auction is scheduled to take place on August 30, but there are already signs that there will not be enough time to meet the deadline, which could postpone the auction until September or October.
In CTEEP's view, it is important to issue a specific regulation for BESS, the first part of which is expected to be published by December 2024. However, the company also believes that only minor adjustments to the hybrid power plant regulations would be necessary to include hybrid BESS in the LRCAP 2024.
CTEEP has practical experience in the use of batteries for energy storage since 2022, with a project at the Registro Substation, with a capacity of 60 MWh. This technology increases reliability during consumption peaks on the South Coast of São Paulo, especially in the summer, reinforcing the power grid, reducing the load on lines in the region and ensuring additional supply for up to two hours.
“The Registry BESS avoided the consumption of around 350 thousand liters of diesel oil in two years of operation, by eliminating the use of diesel generation, which was the alternative solution for the region”, highlighted Wada.
Since the inauguration of the system, more than 40 dispatches of stored energy have been carried out. For the company, “storage systems have excellent attributes to be added to the SIN (National Interconnected System), and ISA CTEEP is interested in developing new storage projects, as well as other technological innovations.”
According to Markus Vlasits, president of ABSAE (Brazilian Association of Energy Storage Solutions), storage systems have at least four main attributes:
a) Polyvalence: BESS act as a source or load, depending on the situation, absorbing surplus renewable generation and injecting power when necessary.
b) Speed: the activation time of a BESS is less than 0,5 seconds, while traditional plants take minutes or even hours. Due to this speed, BESS are used for real-time frequency and voltage regulation, via automated dispatches.
c) Locational flexibility: BESS do not depend on gas pipelines, water availability or other resources, and can be installed where they are most useful for the electrical system.
d) Reduced implementation period: the BESS at the Registro substation was implemented in approximately 12 months, while other works in the electricity sector, except solar, have much longer deadlines.
Sérgio Jacobsen, CEO of Micropower Energia, expressed surprise at the minister’s statement that the technology is not mature. “We do not need specific regulation for the LRCAP. The battery associated with a solar plant has the same effect as a thermal plant.”
Commercially, according to experts, the technology can compete with other solutions without subsidies, delivering the same attributes as a fossil fuel-powered thermal plant. “It is difficult to conceive that a renewable energy source would not participate in a contract that runs from 2027 to 2043, when the rest of the world is decarbonizing the matrix,” said Jacobsen.
Carlos Brandão, president of ABAQUE (Brazilian Association for Energy Storage and Quality), highlighted that the entity has been working on regulating energy storage in Brazil since 2015. “It is inexplicable that, in nine years, Brazil has not made any progress and now, in 2024, there is still a lack of regulation.”
He said battery systems can compete with other sources, since the technology costs around US$100/MWh. “We advocate the absence of subsidies, allowing all sources to compete equally in the capacity auction,” Brandão argued.
It is estimated that around 40 GW of battery storage systems are installed worldwide. According to TR Soluções, around 4 GW must be contracted at the auction for delivery in 2027 and the remaining 3,5 GW in 2028.
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