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Energy Storage Market in Latin America to Reach 34 GW by 2035, Wood Mackenzie Says

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Latin America's energy storage market is projected to expand to 34 gigawatts in 2035 from 2.5 GW in 2025, but a lack of incentives will remain a challenge to deployment, Wood Mackenzie said Thursday.

Investments in longer-duration systems are increasing to address high renewables curtailment and dated grid infrastructure, according to the research firm.

Wood Mackenzie noted that Chile is leading the growth, though there is a risk of price cannibalization in the northern grid due to increasing supply.

In Mexico, new policies should help increase capacity to at least 3 GW by 2030, the research said.

In Brazil, a dedicated battery tender in December could increase capacity from 2028 onwards. The research firm highlighted, however, that "without clear remuneration mechanisms, project financing will remain challenging in the near term."

Recent tender activities in Argentina have awarded 1.3 GW of standalone storage capacity, with operations targeted for 2027.

"The pipeline is growing fast, but deployment stalls without comprehensive regulatory frameworks with clear remuneration mechanisms," said Wood Mackenzie analyst Pamela Morales.

The Dominican Republic now has the most structured regulatory framework in the region, with a mandate requiring new utility-scale projects to install energy storage systems equivalent to at least 50% of generation capacity. Around 500 megawatts of storage capacity is targeted by 2030.

Meanwhile, "most markets lack defined remuneration for ancillary services and energy arbitrage, making long-term bankability difficult," according to the research firm. Other challenges include limited financing, permitting delays, and a low number of off-takers.

"Latin America still needs to find a balance between mandates and incentives to develop the market. Countries that build bankable revenue frameworks will attract the investment needed to sustain growth well beyond the current policy-driven wave," Morales said.

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