John Price
Managing Director
AMI
Valentina Meneses
Energy Practice Co-Director
AMI
Latin America is entering a transformative decade in its energy landscape, driven by the urgent need to expand power output, decarbonize, lower energy costs, improve grid resilience, and integrate massive volumes of renewable energy. Battery Energy Storage Systems (BESS) have emerged as the linchpin technology to realize these objectives. With projected revenues of nearly $5.9 billion by 2030—up from $680 million in 2023—the region is poised for a rapid and uneven expansion in storage markets across utility-scale, commercial & industrial (C&I), and remote grid applications.
However, such a rosy forecast is predicated upon the sudden spread of common sense across well-informed bureaucrats and regulators who see common ground and are motivated by a sense of purpose to transform Latin America’s energy sectors. Those are demanding caveats that will not become reality in all markets even if the benefits of expanding investment in energy storage are both economically and politically clear to see.
Recently, Americas Market Intelligence joined forces with Informa Markets to conduct a webinar on the status and future of Latin America’s BESS market. Joining us in the webinar was Sandra Barba Lizarralde, Director of Business Development and Policy in Latin America for Tesla Energy. The webinar was replete with insights and worth a listen/watch. One of the clearest takeaways from the webinar is that each of the top 8 BESS markets in Latin America are all marching to the beat of their own realities and warrant separate study.
Regional Leaders: Chile, Brazil, and Mexico
Chile: Latin America’s BESS Pioneer
Chile remains the regional leader in battery storage, thanks to a combination of ambitious renewable targe (60% renewable share of all energy use by 2030), advanced regulatory frameworks, and successful project execution. Some of Chile’s market highlights include:
- 5.9 GW of BESS (24.7 GWh) installed capacity is projected by 2030
- Government mandates at least 2 GW of storage to support its 60% renewable electricity goal
- Engie’s “Coya” project (638 MWh) is currently the largest in Latin America
- Annual battery additions could exceed 800–1000 MW in the late 2020s if supportive policies fully take effect
The Chilean government has enabled standalone storage systems and created favorable rules for remuneration, energy arbitrage, and grid services. Chile’s storage market success stems from the alignment of regulation, market incentives, and project bankability.
The utility scale segment dominates Chile’s energy storage landscape. Large power generation companies are the primary investors in BESS, usually pairing them with renewable plants. Key players include Engie, AES Andes (AES), Enel, and Colbún, who are deploying batteries to provide firm capacity and ancillary services. For instance, Engie has a portfolio of big projects: along with the 139 MW Coya system, it commissioned a 48 MW/264 MWh “Capricornio” BESS in 2023 and is building nearly 1 GWh of solar+storage in Antofagasta. AES Andes is likewise investing (it announced a ~$400M plan at COP26 to boost Chile’s BESS capacity) and even piloting non-battery storage (e.g. a thermal storage project).
The mining industry – a huge power consumer in Chile – is an indirect beneficiary: mines are increasingly sourcing renewable energy, so utility-scale batteries on the grid help ensure stable supply, even when solar or wind output fluctuates. Some mining operations are also evaluating on-site BESS for microgrids or backup, though most large mine projects so far have leaned on grid improvements. The commercial/industrial BTM segment in Chile is currently small (residential and C&I behind-the-meter accounted for only ~8% of projected capacity additions). Chile’s excellent solar resource has not translated to big behind-meter storage uptake yet, due to limited retail incentives. Thus, the largest “customers” for storage in Chile will continue to be grid operators and utilities procuring batteries to smooth renewable generation and defer transmission upgrades, as well as renewable developers adding batteries to earn capacity payments and reduce curtailment of their projects.
Chile has developed one of the most advanced pro-storage regulatory frameworks in the region. Recent reforms explicitly recognize energy storage and create multiple revenue streams. In late 2022, Chile passed an Energy Storage and Electromobility Law enabling standalone BESS to earn income from energy arbitrage and capacity reserve services. Further, a new grid regulation in 2023 allows batteries (including those co-located with renewables) to receive fixed payments for grid support (sufficiency capacity) and participate in ancillary service markets.
Some regulatory challenges remain. Despite strong growth, virtual power plant (VPP) models and ancillary services are still not fully monetizable, limiting the financial return of some storage business models. But at the end of the day, if the rest of Latin America had its regulatory ducks in order the way the Chileans do, this industry would be 20x larger than it is today.
Brazil: A Sleeping Giant Awakens
Brazil, the largest power market in the region, is on the brink of a major BESS breakthrough. Though dominated historically by hydroelectricity, the country’s increasing solar and wind penetration is introducing grid imbalance and curtailment risks—opening the door for batteries. Some market development highlights include:
- First national BESS auction in 2025 to contract 300 MW with 4-hour discharge
- Market projected to exceed US$3.8 billion (R$22.5 billion) by 2030
- Over 685 MWh of installed capacity by 2024, 70% of it behind-the-meter
Thus far, industrial and commercial consumers have been the primary adopters of batteries in Brazil. An unreliable grid and expensive self-generation costs drive businesses to install BESS for energy security. For example, data centers and large manufacturers are deploying battery systems to ride through outages and perform peak shaving (reducing peak demand charges) – demand for storage components in Brazil’s C&I segment jumped nearly 90% from 2023 to 2024. In the utility-scale space, power producers and grid operators are now entering several pilot projects (e.g. a 30 MW battery system by ISA for transmission support) that have proven technical viability.
Traditional energy companies are also investing – for instance, Portugal’s EDP and others have signaled interest in Brazil’s upcoming battery auctions. We can expect major utilities and renewable developers (some of the largest being Neoenergia (Iberdrola), Engie, AES Brazil, etc.) to become key customers for large BESS projects that provide peak capacity and ancillary services to the grid.
Brazil’s regulatory development is still evolving and should take shape this year (2025). The government is implementing a three-phase roadmap:
- Technical definitions and service modeling
- Regulatory sandboxes and pilot projects
- Integration of advanced market mechanisms and aggregators
However, industry players emphasize that economic signals (e.g., time-of-use pricing) are currently too weak to support storage arbitrage, and tax burdens on imported BESS tech reach up to 70% of CAPEX, rendering many projects inviable. Until these issues are addressed, the focus will remain on regulated auctions and capacity remuneration. Needless to say, if a Brazil-US tariff battle ensues, project costs could rise even further.
Mexico: Regulation-Driven Growth
Mexico is emerging as a regional BESS hotspot due to new government regulation under President Sheinbaum. Its new Grid Code mandates that all new solar and wind plants must include BESS equal to 30% of generation capacity, with at least 3 hours of storage. Some of the market development highlights include:
- Forecast: 574 MW of storage by 2028
- To meet its ambitious renewable energy output goals, Mexico will need 4-6 GW of energy storage by 2030.
- CFE (Federal Electricity Commission) has concrete plans to add 2 GW of storage by 2030, tied to 21.8 GW of new generation, 80% of which will come from clean sources
- New DAC regulations require renewable projects to incorporate 30% BESS capacity.
- Several utility-scale BESS project tenders were announced in 2025 alone
Energy sovereignty is a highly charged political issue in Mexico and an important driver of Mexico’s about face on energy reform. Two administrations ago, President Peña Neto opened up the monopolies of CFE and Pemex, the two state-owned companies that dominate the power and energy sector respectively in Mexico. President AMLO blocked many of the private sector investments that followed the guidelines of the standing energy reforms. In a dramatic political legacy move, during the last 30 days of his Presidency, AMLO, armed with a supermajority, re-legislated the predominance of CFE and Pemex, under the ideological banner of energy sovereignty. President Sheinbaum aims to sustain energy sovereignty while simultaneously embracing clean energy.
With historically high demand charges and an unreliable grid in some areas, large companies have turned to batteries for energy cost management and backup. For example, Grupo Bimbo (the world’s largest baker) and Walmart have piloted BESS to cut peak electricity bills by 35% or more while improving supply stability. Local developers like Quartux and ON Energy have installed dozens of MWh of behind-the-meter batteries at hotels, resorts, and factories in tourist regions like Cancún – A 25 MWh C&I battery by Quartux in Cancún is cited as the largest C&I installation in Latin America.
Moving forward, renewable energy developers and utilities will become the largest storage customers due to the 30% co-location rule. Many new solar and wind farms (including projects by state utility CFE and private IPPs like Acciona, Iberdrola, AES, etc.) will incorporate on-site battery banks to meet the requirement. We can also expect independent power producers to deploy BESS for providing grid services: for instance, developers are exploring stand-alone storage projects for ancillary services in the northern grid where wind/solar penetration is rising.
Overall, Mexico’s biggest storage users in the late 2020s will likely be a mix of C&I firms seeking bill savings and large renewable project owners integrating batteries to smooth intermittent output.
be impacted by a re-negotiation of the USMCA? An AMI political risk assessment can help answer such a question.
Secondary Movers: Colombia, Argentina, Peru, Panama, and the Dominican Republic
Colombia: An Energy Security Play
Colombia’s heavy hydro reliance exposes it to climate volatility, as seen in Ecuador’s recent blackouts and Brazil’s a few years ago. Storage is seen as a grid reliability tool and a solution for transmission congestion, especially in the north where solar and wind potential are concentrated. Some market highlights include:
- First utility-scale BESS (45 MW) launched in 2023
- National Energy Plan calls for 2 GW of storage by 2030
- Regulatory Resolution 823 allows batteries to provide grid support services
The regulatory framework today remains incipient. BESS are currently permitted only as temporary congestion relief tools, not yet eligible for energy market or ancillary service compensation. But regulators are working toward a more integrated role for batteries. Colombia’s Ministry of Energy and Mines is considering launching tenders for storage co-located with solar and wind farms in La Guajira, a region with high renewable resource potential but weak grid infrastructure.
Argentina: A Bold First Step
Argentina entered the BESS race with the “Alma GBA” tender for 500 MW of storage, launched in early 2025 and worth $500 million. The project targets grid reliability in Buenos Aires and is scheduled for deployment by 2026. After decades of under investment in grids, The ENRE (National Electricity Regulatory Entity) is studying use cases where BESS can mitigate peak load and defer network investments.
The Milei administration is keen to create investment incentives to quickly modernize Argentina, beginning with infrastructure. Though Argentina is blessed with burgeoning national gas and oil resources with the Vaca Muerta discoveries, the southern reaches of the country are also endowed with some of the best wind power potential in the world. Renewable developers in Patagonia and Jujuy are eyeing storage for improved dispatch priority.
As the world descends upon Argentina to mine its enviable lithium deposits, these remote sites, much like those found in Chile, will be prime locations for stand-alone solar power generation projects with integrated battery systems. As a dollar generating export, developers can use dollarized PPAs to lower F/X risk for investors. There is increasing calls for using renewable energy to support an export driven battery manufacturing industry that leverages Argentina’s lithium deposits.
Peru: Gradual Progress
With 16 GW of generation capacity, Peru is focusing on deploying BESS for ancillary services. Natural gas is cheap and abundant in the south, making it hard for batteries to compete. However, northern regions have non-interconnected zones where batteries can provide reliable power. As a result, some industrial and auto-generation plants are starting to use batteries.
Peru’s future in BESS may lie in combining storage with isolated grid and industrial use cases. Mining companies operating in the Andes and the Amazon have shown interest in hybrid solar + BESS systems to reduce diesel dependency.
With regulatory support still under development, demand forecasts are modest, predicting an installed market size of a few hundred MW by 2030.
Panama: Central America’s First-Mover
Panama made history with its 2024 tender for 500 MW of renewables plus storage, aiming for 120–150 MW of BESS deployment. This represents the first market-based approach to energy storage in Central America, potentially serving as a model for the region.
Dominican Republic: High Stakes, High Opportunity
The Dominican Republic is uniquely motivated to embrace BESS:
- Grid instability, frequent blackouts, and heavy fossil fuel use dominate the landscape
- The country is expected to need 250–400 MW of BESS by 2028
- In 2025, a 15-assignment capacity tender was launched, including storage with solar PV plants >20 MW
A history of misguided privatization—subsidizing distribution while guaranteeing high generator prices—contributes an estimated $475 million USD to the national public fiscal deficit each year. Batteries are seen as a financial and technical solution to optimize generation and reduce subsidies. Not surprisingly, the government has signaled strong support for utility-scale storage deployment.
Market Drivers and Use Cases
Grid Stability & Ancillary Services
As renewables increase volatility, BESS can deliver frequency regulation, reserve power, and reactive support. Chile leads the way with a regulatory framework that defines these services and enables monetization.
Renewable Integration & Curtailment Avoidance
As renewables increase volatility, BESS can deliver frequency regulation, reserve power, and reactive support. Chile leads the way with a regulatory framework that defines these services and enables monetization.
Renewable Integration & Curtailment Avoidance
Co-locating BESS with solar and wind farms helps mitigate curtailment and stabilize output. Mexico’s storage mandate exemplifies this.
C&I and Behind-the-Meter Applications
Especially strong in Brazil, where 70% of capacity is behind the meter. Industrial parks, data centers, shopping centers, and mines are early adopters.
Remote and Island Microgrids
BESS is essential in non-interconnected zones—such as Peru’s Amazon, mining throughout the Andes, and pockets of the Dominican Republic—to replace diesel, stabilize power, and enhance energy security.
Regulatory Challenges
The demand case for BESS in Latin America is clear. Investors, integrators and equipment providers are all ready to pounce at the opportunities in the region. The biggest bottleneck holding back the BESS industry in Latin America is the lack of clear and well designed (from an incentive perspective) regulations. Specifically:
- Ambiguity in Market Participation: Many countries still lack clear rules for storage participation in wholesale and ancillary markets.
- Import Duties and Taxes: Brazil’s duties make imported batteries cost-prohibitive without local assembly.
- Weak Price Signals: Arbitrage opportunities are often limited by flat pricing structures or subsidized energy models.
- Virtual Power Plant Models: Still under testing in Chile and unavailable in most other countries.
- Limited Pilot Projects: While regulatory sandboxes have helped in Brazil, they need to be expanded regionally.
A Decade to Build Upon
Battery storage is no longer a futuristic technology for Latin America—it is a critical pillar of the region’s energy future. As utilities, regulators, and private sector players embrace its versatility, BESS is becoming essential not just for renewable integration, but also for grid resilience, peak load management, and energy access.
The next five years will determine whether Latin America can overcome regulatory inertia, attract the necessary capital, and execute on the many storage targets already announced.
Hopefully some of these tips will be helpful as you gear up for a future webinar or work to prepare your company’s own thought leaders.
Chile offers a blueprint. Mexico shows the power of mandates. Brazil must unleash its latent potential. And the rest of the region watches and learns.
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