Assessing Photovoltaic Power Plants With Battery Energy Storage for Capacity Reserve Auctions in Brazil

The rapid expansion of variable renewable energy in Brazil has induced severe intraday curtailment, characterized by a pronounced “Duck Curve” driven by transmission limits and regional centralization of generation. This study evaluates the techno‐economic and regulatory feasibility of utility‐scale photovoltaic (PV) plants integrated with battery energy storage systems (BESS) to mitigate curtailment and meet the firm capacity requirements of the Brazilian Capacity Reserve Auctions. Four 30 MW AC (alternating current) hybrid plants, each coupled with a 150 MWh BESS, were simulated across Brazil's four electrical submarkets using the System Advisor Model (SAM) and a customized financial model. Results demonstrate that this configuration guarantees a 4‐h daily evening dispatch with a loss of load probability (LoLP) below 0.5%. Furthermore, the system operates at a strict maximum discharging C‐rate of 0.20 C, perfectly aligning with manufacturer guidelines to preserve battery lifespan and control depth of discharge (DoD) degradation. Economically, relying exclusively on spot market arbitrage is unviable, as the levelized cost of storage (LCOS) exceeds regulatory price ceilings. However, backed by fixed auction revenues and subsidized financing, the projects achieve highly profitable internal rates of return (IRR) between 23.53% and 24.29% across all regions. Supported by the recent enactment of Law No. 15.269/2025, which formally establishes energy storage as an autonomous sector activity, these findings confirm that BESS deployment under capacity reserve auctions is an immediately viable solution to ensure grid reliability and unlock further renewable expansion.