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Brazil's first power auction for batteries might cause $450 million in investments

Brazil's firstever auction to include batteries and storage systems to its nationwide power grid, scheduled for later on this year, is seen generating $ 450 million in financial investments, according to an estimate by consultancy firm Oliver Wyman.

WHY IT is very important

The batteries would have the ability to save energy from wind and solar power, eco-friendly sources which, although growing in value for Brazil's power grid, stay limited in that as they are less predictable than thermoelectric or hydro power units.

ADDITIONAL CONTEXT

Brazil's government often holds auctions to buy power capability to be utilized when need is high but supply is lower, such as in the late afternoons when solar energy systems stop producing energy.

The June auction will be the very first from the federal government enabling batteries and storage systems to participate, and will be special to such innovations.

BY THE NUMBERS

Oliver Wyman estimates that, if the federal government purchases around 300 megawatts of energy capability, the winners of the auction could invest $450 million to get their jobs online.

According to the consultancy firm, if Brazil were to have those batteries and storage power systems working already, the country could have lowered the amount of nonrenewable fuel sources burned by thermoelectric plants by 21% between April and December of 2024.

SECRET PRICES QUOTE

Oliver Wyman engagement supervisor for energy and natural resources Rodrigo Borges stated that the approximated investments required might still change depending on details about the auction which have not yet been revealed.

Among the main doubts is concerning the size of power demand and its area, Borges informed Reuters. This can create more bottlenecks or fewer bottlenecks, or encourage more or less investment, he included.

WHAT'S NEXT

According to the government's proposal, the auction will take place in June and will use 10-year contracts, with supply starting in July 2029. The systems will have to deliver optimum power accessibility equal to 4 hours a day, getting a repaired rate for this.

Power companies, such as Portugal's EDP and Brazil's ISA Energia, have suggested their interest in taking part in the auction.

(source: Reuters)