Energy storage moves to the core of Brazil’s power system and inverters become a critical factor
- Energy Channel Global
- 2 days ago
- 3 min read
SMA experts warn: grid stability and success in upcoming LRCAP auction will depend more on conversion technology than batteries
ATIBAIA, Brazil — The rapid expansion of renewable energy in Brazil is creating a new challenge for the power system: maintaining grid stability amid increasingly intermittent and decentralized generation.
In this context, energy storage is no longer just a trend it is becoming a strategic asset, especially with the upcoming capacity auction (LRCAP), expected to unlock billions in investments in the coming months.
In an interview with EnergyChannel, Rodrigo Cardoso Gatti, Country Manager at SMA Brazil, and Henrique Almeida, Sales Director, explain why the technical debate is shifting and where the main risks for investors lie.
Brazil’s emerging grid challenge
According to the executives, Brazil is facing an energy paradox: excess renewable generation alongside rising grid instability.
This is driven by:
long transmission distances
high penetration of solar and wind
low system inertia
“Brazil’s power system is facing stability challenges that didn’t exist a few years ago,” says Gatti.
Grid forming: a game-changing technology
The solution lies in a new generation of technologies known as grid forming.
Unlike traditional systems (grid following), which depend on the grid, grid-forming systems:
actively stabilize the grid
provide inertia, voltage, and frequency control
help prevent cascading failures
“In the past, systems would disconnect during faults. Now, the idea is the opposite they must support the grid,” explains Almeida.
A critical but overlooked risk: the inverter
While most of the market focuses on batteries which account for roughly 80% of CAPEX the executives highlight a key issue:
👉 The real technical risk lies in the inverter.
“Many investors focus only on batteries, but the critical factor for grid compliance is the inverter’s true grid-forming capability,” says Gatti.
According to him:
not all solutions meet system operator requirements
few technologies are proven at scale
failures can jeopardize entire projects
LRCAP: a turning point for the sector
The upcoming capacity auction is expected to mark a new phase for energy storage in Brazil.
Key aspects include:
stricter technical requirements
focus on grid stability
new revenue models
It may also enable:
participation of transmission companies
ancillary services markets
compensation for stability, not just energy
“In Europe, there are already markets for frequency control and inertia. This is a natural path for Brazil,” Almeida notes.
Architecture and strategy: defining success
Project design is another critical factor.
Experts highlight the importance of:
centralized inverter architecture
battery-agnostic systems
technological flexibility
This is essential in a context where:
battery technology evolves rapidly
systems become obsolete within years
projects operate over 20–30-year horizons
Lifetime and long-term value
While the market focuses on battery degradation, SMA points to another overlooked factor:
👉 inverter lifetime
The company states its solutions can deliver up to 19,000 cycles, enabling:
multiple use cases over time
participation in different markets
higher long-term returns
“Investors need to look beyond the 10-year auction horizon. These are multi-decade assets,” says Almeida.
A market still taking shape
Brazil is still defining:
local content rules
revenue models
final technical requirements
But one thing is clear:
👉 energy storage will be central to the future power system.
And more importantly technology choices will define the winners.
Energy storage moves to the core of Brazil’s power system and inverters become a critical factor
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