AMI – Latam Battery Storage Landscape, 2024

The Latin America and Caribbean region currently lacks a regulatory framework to compensate project owners for battery storage projects. Chile is leading the way in the region with high renewable penetration and forthcoming legislation establishing capacity payments for battery energy storage system (BESS) projects. By 2026, Chile is expected to have 13.2 GWh/ 2 GW of operating energy storage, helping reduce curtailment and accelerating the retirement of coal-fired capacity. The northern regions of Antofagasta and Atacama account for a significant portion of the BESS pipeline in Chile. As storage assets are rapidly installed, revenue potential for energy arbitrage is expected to decrease, leading operators to explore other revenue streams. First-movers in the Chilean market are already capitalizing on this trend, potentially creating a competitive advantage that could be replicated in other markets. A capacity payment for storage assets in 2024 is projected to provide 15% of revenues for stand-alone projects through 2026, with the remaining 85% coming from energy arbitrage.