Investors in renewable energy mobilize to bid on Brazil's battery auction but warn against risks

The government announced on Wednesday that major international investors in renewable energy are lined up to bid for the first battery auction. This will give the storage units the resources they need to buy power from Brazil's struggling renewable generators.

In recent years, solar and wind energy projects have suffered losses of hundreds of millions of dollar because the excess power was not used.

After two years of promises and much preparation by companies, the auction to purchase batteries for the country’s power sector was added to the schedule of the government for December.

Andre Flores said that Brookfield's Brazil head of energy investments and transition, Andre Flores had already completed technical and electrical studies. If there were an auction today, we would be prepared.

The executive of the Canadian asset manager Brookfield Renewable said that batteries were the main focus this year for the unit, and Brazil was the "missing part" in its portfolio.

Brasol is another top investor who has BlackRock and Siemens as shareholders.

Around 50 employees of the company, which specializes in energy solutions, such as distributed solar power generation, work daily to ensure its participation.

Diogo Zaverucha is Brasol's Director of Energy Storage. He said that his team had developed battery projects in Brazil before the official announcement by the government. They also made trips to China and other key markets to further negotiate with financiers and suppliers.

He said that "serious and mature" participation in the auction requires a great deal of planning, time and investment.

The 'auction' has mobilized not only battery operators but also manufacturers, particularly from China. They see Brazil as an opportunity to secure orders in a market that is oversupplied.

Sungrow, a Chinese supplier of renewable energy equipment has bet on Brazil's 'potential' for batteries, since 2020. Mauro Baquera is the technical director at Sungrow for BESS and Solar Energy in Latin America.

Investors have raised concerns about the financing of the auction despite the "appetite" for it. According to a law passed by Congress last summer, costs will be borne by power generators. This could lead to litigation. (Leticia Fucuchima, Fernando Cardoso, and David Gregorio are reporting; Fernando Cardoso is writing)

(source: Reuters)