(Bloomberg) — Brazil is expected to hold its first electricity auction for large-scale batteries in April, and Chinese companies — which have already invested heavily in the country’s electricity sector — are identified as the main candidates, potentially competing with names like Tesla and Petrobras.
The auction represents another opportunity for the expansion of Chinese companies in Brazil. Between 2007 and 2024, electricity sector projects accounted for 45% of Chinese investments in Latin America’s largest economy, totaling US$35 billion, according to the Brazil-China Business Council (CEBC).
According to BloombergNEF (BNEF), other Latin American countries have already begun contracting or building utility-scale energy storage projects. Chile was an early adopter of the technology and plans to significantly expand its battery capacity over the next five years. Argentina awarded 667 megawatts in its first storage auction last September, with operations expected by 2027. The Mexican state-owned electricity company announced at least 2.2 gigawatts of capacity in its five-year expansion plan.
Opportunity with security!
The global advancement of solar and wind generation has brought a chronic problem: waste (curtailment), when renewable plants need to be turned off due to lack of demand. Batteries can absorb excess cheap energy and return it to the grid at times of highest consumption.
In 2025, Brazil lost an average of 26% of solar generation and 19% of wind generation due to curtailment, according to Vinicius Nunes, an analyst at BNEF in São Paulo. This represented an estimated loss of R$7 billion (US$1.3 billion).
The Brazilian government hopes that the auction will guarantee 2 gigawatts (GW) of capacity. BNEF estimates that annual battery storage installations in the country could reach 1.3 GW by 2030.
According to Larissa Wachholz, partner at Vallya consultancy, specializing in China, Chinese companies have competitive advantages. They lead global battery production and, as the world’s largest investors in renewable energy, have already faced the challenges of integrating storage systems into electrical grids.
“There are already many Chinese companies in Brazil that know the energy market and feel comfortable expanding their operations to the storage segment as well,” said Wachholz.
But the field will not be exclusive to Chinese women. Among the companies that submitted comments during the auction’s public consultation are Tesla, Petrobras and Axia Energia.
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Companies that intend to act as systems integrators, combining hardware, software and controls, must submit their own proposals at the auction. Those wishing to supply equipment will form partnerships with other companies. The expectation is that Chinese manufacturers will dominate the supply of equipment, regardless of who wins the contracts.
“China controls everything, from the manufacturing of the cells to the production of the inputs needed to manufacture them,” said Markus Vlasits, president of the Brazilian Energy Storage Association (Absae).
Among the dozens of Absae members is the giant Huawei, which has been operating in Brazil for almost 30 years and plans to participate in the auction as an equipment supplier.
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“Our focus is to find partners to work together and win the auction,” said Roberto Valer, technology director at Huawei Digital Power Brasil. “It’s not just about buying a battery in China and hoping it reaches its final destination without any problems.”
Best known for its telecommunications equipment, Huawei has been advancing in the global energy sector and throughout Latin America. The Chinese company has supplied inverters for solar plants in Argentina, energy storage for hospitals in Peru and charging infrastructure for heavy electric trucks in Mexico. Last month, consultancy Wood Mackenzie classified Huawei as the world’s largest manufacturer of inverters for solar plants. Huawei’s energy division accounted for nearly 10% of the company’s total revenue in 2024.
Huawei also serves as a manufacturer and integrator of grid-scale energy storage systems, designing battery packs, power conversion systems (PCS) and management software, although the cells are supplied by global partners.
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In April 2025, the company received the Minister of Mines and Energy, Alexandre Silveira, on a visit to China, to present its battery systems. Huawei also acts proactively in regulating the sector, holding workshops with ANEEL and EPE (Energy Research Company).
Other Chinese companies with a growing presence in Brazil also showed interest in participating in the auction, such as State Power Investment (SPIC), which has solar and wind plants in the country, China Energy Engineering (CEEC), which recently acquired three solar plants, and China Three Gorges (CTG), with a strong presence in hydroelectric and wind generation.
Minister Alexandre Silveira has been personally committed to attracting Chinese investment. This week, he was on an official mission in China, discussing the auction in meetings with Huawei, Contemporary Amperex Technology (CATL), Envision Energy and Sany Heavy Industry, among others.
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“I am clear about the importance of this strong relationship between the Ministry of Mines and Energy and representatives of the energy and mining sectors in China,” said Silveira in a press release on Wednesday (21). The ministry did not respond to requests for comment.
While many Western countries consider critical equipment manufactured by Chinese companies a risk to national security, Brazil is unlikely to adopt that stance, said BNEF’s Nunes. “Regardless of the outcome of the auction,” he added, “much of the battery equipment will certainly be supplied by Chinese companies.”
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