As distributed solar generation gains a larger share of Brazil’s electricity system, challenges such as reverse energy flows, voltage instability, and centralized generation outages are becoming increasingly frequent. Battery energy storage systems (BESS) are often cited as a promising solution, but their effective deployment depends on technical, economic, and regulatory feasibility.
In this context, the study “Storage at the Edge: Distributed BESS as a Technical and Regulatory Solution for Brazil’s Energy Transition,” published in Energy Policy, evaluates three BESS implementation strategies in the Brazilian National Interconnected System (SIN) from technical, economic, and regulatory perspectives, based on real operational data from the 12-month period between July 2024 and June 2025: Standalone BESS as independent market agents (Strategy 1);behind-the-meter storage to shift low-voltage consumption (Strategy 2) and co-located BESS with distributed photovoltaic systems to shift PV injection (Strategy 3).
Battery operation is modeled using predefined charging and discharging windows designed to reflect viable strategies under current Brazilian market structures and tariffs. Rather than introducing algorithmic innovations, the study’s contribution lies in its empirical foundation and transparency, allowing clear comparisons between strategies and highlighting mismatches between economic incentives, regulatory norms, and system needs.
Strategy 1: Standalone BESS
This strategy explores a configuration in which BESS operate as independent market agents participating directly in the wholesale electricity market.
Economic results: For a BESS price of BRL 1,250 ($240)/kWh, the return on investment (ROI) is 1.5% when the short-term energy market differential is BRL 400 ($76.60)/MWh. At a BESS price of BRL 500/kWh, a positive ROI of 1.5% is achieved with a spot price differential of BRL 160 /MWh. In the scenario of BRL 500 /kWh and a BRL 400 /MWh differential, ROI could reach 13.4%. The study considers investments viable starting from a minimum ROI of 10–11%.
Technical results: While price arbitrage opportunities exist, optimal charge/discharge cycles based on prices do not always align with periods when waste reduction or power variation mitigation is most needed. Up to 72.5 GWh/18.2 GW of BESS could be deployed before excessive load shifting causes nighttime ballast issues.
Regulatory perspective: Although technically viable, the strategy currently lacks regulatory support. Brazilian regulations do not recognize storage as a generation/load agent, nor do they allow dispatch or compensation through system services markets.
Strategy 2: Shifting Low-Voltage Consumption
This strategy examines BESS installed at low-voltage consumer units, with or without distributed generation, to shift electricity use from nighttime peaks to midday solar surpluses. Batteries are set to charge from 07:00–14:00 and discharge from 17:00–22:00, aligning with peak tariff periods under Brazil’s white tariff system.
Economic results: For a BRL 1,500/kWh BESS, ROI is 1.6% with a BRL 320/MWh peak-to-peak tariff difference. For smaller differences (~ BRL80/MWh), ROI becomes positive at BRL 750/kWh or lower. ROI could reach 20% with a 500 BRL/kWh BESS and 400 BRL/MWh tariff difference.
Technical results: Batteries with 40 GWh/8.6 GW capacity support temporal alignment between demand and solar generation.
Regulatory perspective: Fully permitted, but economic benefits for consumers are modest; under the current tariff, off-peak savings are limited to ~5%.
Strategy 3: Shifting Photovoltaic Injection
This strategy uses co-located BESS with distributed PV systems to shift energy injection from surplus periods to high-demand periods. Batteries charge until reaching 3 hours of capacity and discharge from 18:00–21:00 during peak tariffs.
Economic results: ROI becomes positive when the peak-to-standard tariff ratio reaches 1.6 with BESS ≤1,000 BRL/kWh. For higher BESS prices, ROI requires ratios ≥1.8. A 500 BRL/kWh BESS with peak tariffs twice standard rates yields ROI up to 16.6%. Weekend simulations show positive ROI in all scenarios.
Technical results: Strategy requires 18 GWh/6 GW of BESS. Simple to implement, it benefits from Brazil’s energy compensation scheme: each MWh injected during peak hours converts to ~1.6 MWh of off-peak credit for low-voltage consumers.
Distributed Storage Requires Coordination
Incorporating location constraints, real-time dispatch, or coordinated prosumer participation could increase the systemic value of distributed storage, enabling targeted congestion relief and greater flexibility. Achieving this would require more granular data, digital infrastructure, and market access mechanisms currently unavailable in Brazil, making these areas priorities for future research.
Ultimately, realizing the potential of distributed storage requires coordinated technical, economic, and regulatory action. As Brazil and other countries transition to more decentralized energy systems, storage will be critical for reliability, efficiency, and equity. Effective implementation also depends on regulatory innovation, market structures, and tariffs that incentivize flexibility. Policymakers should consider creating new functions for storage, enabling load aggregators, and aligning private investment with public interest.
From pv magazine Brazil
This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: editors@pv-magazine.com.
Your email address will not be published.
This website uses cookies to anonymously count visitor numbers. View our privacy policy.
The cookie settings on this website are set to “allow cookies” to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click “Accept” below then you are consenting to this.
Close
