Brazil targets energy storage as option for electricity system

Brazil is targeting energy storage as one of the options for increasing the security of its electricity system, given the strong growth of intermittent energy sources, mostly wind and solar.

Meanwhile, authorities are working to make the local green hydrogen market viable, an input seen as strategic by the government for industrialization and whose production depends on renewable energy.    

On Wednesday, the president of energy research company EPE, Thiago Prado, said the state-owned entity is mapping the potential for reversible hydroelectric plants that use pumped storage. 

"We’ll partner with a major player with projects around the world to demonstrate its viability in the country," Prado said during the national meeting of electricity sector agents Enase in Rio de Janeiro. 

Reversible power plants are equipped with pump-turbines, which transfer water to the reservoir upstream when there is an excess of energy in the system – which is mainly due to the injection of distributed solar energy – in order to generate when there is a shortage. 

Electric power watchdog Aneel is moving ahead with drafting regulations for energy storage plants. 

The director of the regulator, who is also the rapporteur for the process, Ricardo Tili, said the first phase of the regulation will be ready by December. 

It will deal with issues such as licensing for storage plants, including reversible storage, their access to the transmission network and remuneration for the services provided. 

"It's very clear to me that energy storage will be part of the Brazilian electricity matrix," Tili said during the same event.

He recalled that, despite having cheap and abundant energy, Brazil has expensive power rates.

“Neo-industrialization cannot be achieved with energy rates at the levels we have today,” Tili said.

The mines and energy ministry (MME) is looking at including energy storage solutions in the next backup capacity tender, scheduled for August. 

Prado, however, indicated that that is unlikely to happen.

“It’s a resource that still needs regulation. The contractual risk is high when there are no clear rules,” he said.  

“If they are not present at this auction, there will certainly be debate about future events.” 

Tili highlighted that, if storage projects cannot enter the tender, it is still possible to offer hybrid generation projects, which combine, for example, solar and wind, mitigating the impact of intermittency.

HYDROGEN

The Aneel director said he was concerned about the possibility of subsidies for green hydrogen. 

“This could burden consumers and make industries unviable,” he warned. 

The bill that will establish the regulatory framework for the hydrogen market is being analyzed by the senate.

Also at Enase, development bank BNDES’s energy transition superintendent, Carla Primavera, said it will be difficult for green hydrogen projects to obtain long-term contracts.

“So we’ll have to discuss which risk the financiers will accept to take,” she said. 

Primavera assured that hydrogen is at the center of BNDES's financing strategy and that the bank plans to offer de-risking mechanisms to the market 

“We already have two projects in the pipeline. And, recently, the national treasury offered another solution, which is the capture of sustainable resources abroad, including hydrogen,” said Primavera.