Hydropower and thermoelectric plants, which currently sustain the flexibility of the National Interconnected System (SIN), may end up bearing the bulk of the costs for future battery storage systems, despite already providing this service without specific compensation.
Brazil’s power sector is facing a crucial debate regarding the cost allocation for future battery energy storage system procurements. With the growing demand for grid flexibility, driven by the expansion of intermittent sources such as solar and wind power, the National Electric Energy Agency (Aneel) and the Ministry of Mines and Energy (MME) are proposing mechanisms to fund these requirements, raising questions about who should actually foot the bill.
Currently, the flexibility of the National Interconnected System (SIN) is primarily provided by hydroelectric and thermoelectric plants, which adjust their generation to compensate for fluctuations in demand and renewable output. However, these plants do not receive specific compensation for this essential service, adding a layer of complexity to the debate.
The Rise of Load Ramping and the Need for Flexibility
The load “ramp,” representing rapid variations in electricity demand, has increased significantly in recent years. Data from the National Electric System Operator (ONS) indicates that the largest three-hour net load ramp of the SIN jumped from 16.0 GW in 2019 to an impressive 36.4 GW in 2026.
This phenomenon, now concentrated in the late afternoon, requires a fast-response capability from the grid—something that hydroelectric and thermoelectric plants have been ensuring. The ONS already acknowledges in its Generation Expansion Plan (PEN) that solar generation has demanded greater activity from hydroelectric plants to regulate imbalances.
Aneel’s Allocation Proposal and Emerging Questions
Against this backdrop, Aneel, via Technical Note 101/2026-SGM, proposed distributing the costs of future battery auctions among energy generators. Concurrently, the MME opened a public consultation to discuss amendments to Decree 10.707/2021 and the allocation of the Capacity Reserve Charge (ERCAP) among consumers.
The core discussion centers on the principle of causality: who actually causes the need for flexibility and, therefore, should bear the costs of providing it? For many experts, capacity reserve is a product demanded by the load and supplied by the generator.
Centralized reliability procurement replaces the price that the market failed to form; it does not replace the buyer who would have paid for it.
Aneel‘s proposal, however, suggests that hydroelectric plants, responsible for much of the current modulation, would bear approximately 46% of the charge, and thermoelectric plants around 15%. This means that the sources already delivering flexibility to the power system without extra remuneration would be the main ones responsible for financing future solutions.
Distortion and the Need to Re-evaluate Causality
Law 15.269/2025 added Paragraph 6 to Article 3-A of Law 10.848/2004, establishing that the costs of battery procurement “will be allocated only among energy generators.” Although the underlying argument is the supposed “causality” of intermittent generators regarding the need for storage, critics point out that this logic does not fully hold up.
The increase in load ramping and the choice to expand energy generation with variable sources were matters of public policy and consumption growth, not decisions made by investors in existing plants. Charging hydroelectric and thermoelectric plants for a problem they did not cause would create a significant economic distortion.
International examples, such as China, show that when storage is required, the rule is prospective, applying to new projects. Law 15.269/2025, in its Article 8-A, already provides that new intermittent energy projects must fund capacity reserve procurement if they fail to meet flexibility and storage requirements, which is a more logical and fair approach.
Future Perspectives and the Role of Congress
The need for flexibility in the National Interconnected System is undeniable, and the procurement of batteries is an important step for energy transition and ensuring reliability. However, how these costs are allocated must be carefully reassessed to avoid unduly burdening agents who already contribute to system stability.
The expectation is that the National Congress, through bills such as PL 3.716/2026 in the Chamber and the substitute to PL 5.017/2019 in the Senate, will correct this distortion, ensuring that charge allocation is balanced and reflects the actual causality and benefit of the capacity reserve. The sustainability of the power sector depends on decisions that promote equity and economic efficiency.
