Discussions surrounding battery auctions for capacity reserve in the electricity sector are raising critical disagreements regarding cost allocation and collection risks for the charge.
The upcoming capacity reserve auctions for batteries, anticipated for December, are generating intense debate in the Brazilian electricity sector. The core of the controversy lies in the rules defining the payment of the Capacity Reserve Power Charge (Ercap) and how a potential collection shortfall would be managed.
These issues were widely raised by various market players during the public consultations held by the National Electric Energy Agency (Aneel), highlighting the complexity and potential impacts on the development of clean energy solutions.
While associations representing consumers and distributors advocate for generators to remain solely responsible for the charge’s funding, energy producers and project developers seek contractual flexibility to adapt to potential legislative changes.
This polarization reflects the tension between legal certainty and the need to adapt to a constantly evolving energy landscape, especially with the rise of energy storage technologies.
Who Pays the Bill: Generators or Consumers?
Law 15.269/2025 established that the contracting costs for storage systems through capacity reserve auctions (LRCap) must be shared among generation agents. The draft tender documents for the upcoming auctions mirror this determination, designating the Electric Energy Commercialization Chamber (CCEE) as the representative for generators for the signing of the Capacity Reserve Power Contract (CRCap).
However, there are efforts in the National Congress to expand the payer base, including final consumers in the remuneration for batteries, which adds a layer of uncertainty to the current landscape.
The Brazilian Association of Electricity Distributors (Abradee) and the Brazilian Association of Large Industrial Energy Consumers and Free Consumers (Abrace) uphold the importance of maintaining cost responsibility on generators, as stipulated by law.
They argue that any collection challenges should be resolved within the segment established by legislation, ensuring stability and predictability for the system.
Any challenges related to defining the payer base should be resolved within the segment defined by legislation as responsible for funding.
On the other hand, the Brazilian Association of Independent Electricity Producers (Apine), the Brazilian Association of Self-Production Energy Investors (Abiape), the Brazilian Association of Energy Storage Solutions (Absae), and Comerc Energia propose that the contracts, which will last 15 years, do not “crystallize” the current definition, allowing the cost allocation base to adapt to future changes in legislation and regulation.
Collection Risk: A Point of Tension
Another latent concern pertains to the CRCap clause that classifies the receipt of Ercap as a risk for which the seller is responsible. Associations such as Apine, the Brazilian Association of Electric Power Generation Companies (Abrage), and Absae request the exclusion of this provision, arguing that collection defaults should not impact the remuneration of projects that fulfill their contractual obligations.
Absae emphasizes that the billing, collection, and transfer of funds are operationalized by CCEE and are not under the direct control of the projects.
Any default by the agents responsible for payment, insufficient collection, or legal and regulatory changes affecting this mechanism do not result from any action or omission by the seller.
For Kinea, an alternative would be to provide for a mechanism to recover uncollected amounts, conditioning it on existing collection measures in the regulation, thus mitigating disproportionate risk for the seller.
The Need for Separate Accounts
The management of Ercap funds was also subject to suggestions. Apine and Eneva proposed the creation of separate financial accounts for energy storage contracts, distinguishing them from other capacity reserve contracts. This segregation would prevent default or insufficient collection in one segment from affecting the payment of contracts for other technologies, ensuring greater transparency and financial security.
The implementation of specific sub-accounts for storage systems proves crucial for system integrity, given the growth potential of battery solutions within the renewable energy landscape.
The discussion surrounding the tender documents for battery auctions highlights the complexity of integrating new technologies into the Brazilian electricity sector. A clear definition of the Ercap cost allocation base and the mitigation of collection risks are fundamental to attracting investments and driving the development of energy storage solutions, which are essential for the country’s energy stability and security.
The decisions made by Aneel, considering the contributions from market players, will shape the future of clean energy in Brazil, reinforcing the importance of regulation for the advancement of energy sustainability.
