June 3 (Reuters) – Major international renewable energy investors are lining up for Brazil’s first battery auction, announced by the government on Wednesday, boosting hopes that the storage units will obtain the financial resources to purchase power from the country’s struggling renewable generators.
Solar and wind energy projects have been hit by hundreds of millions of dollars in losses in recent years because excess power has gone unused.
The auction to procure batteries for the country’s power sector, with estimated demand of at least 2 gigawatts (GW), was added to the government’s schedule for December, after two years of promises and much preparation from companies.
“We already have environmental permits for battery projects approved, technical and electrical studies completed,” Andre Flores, Brazil head of energy and transition investments at Brookfield, said. “If there was an auction today, we would be ready.”
The executive from the Canadian asset manager said batteries are the main investment focus for Brookfield Renewable this year, and that Brazil is the “missing piece” in the unit’s portfolio.
Another top investor interested in the auction is Brasol, which has BlackRock and Siemens among its shareholders.
The company, which works with energy solutions such as distributed solar generation, has a team of around 50 people working daily to enable its participation in the auction.
Diogo Zaverucha, Brasol’s director of energy storage, said his team developed battery projects throughout Brazil ahead of the government’s official announcement and pursued trips to several key markets with operational projects, such as China, to strengthen negotiations with suppliers and financiers.
“Serious and mature participation in the auction requires a lot of time, planning and investment,” he said.
Beyond battery operators, the auction has also mobilized manufacturers, especially from China, which see the Brazilian market as a chance to secure orders for an industry facing oversupply.
China’s Sungrow, a supplier of renewable energy equipment, has been betting on Brazil’s potential for batteries since 2020, said Mauro Basquera, the company’s technical director for BESS and solar energy in Latin America.
Despite the appetite for the auction, investors have pointed to a risk related to how the procurement will be financed. Under a law approved by Congress last year, the costs are expected to fall on power generators, which could lead to legal disputes.
Brazil Energy Insight 
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