Latin America’s Energy Storage Market Set to Surge to 34 GW by 2035

Latin America’s energy storage market is on the cusp of a dramatic transformation. According to Wood Mackenzie’s Latin America Energy Storage Outlook 2026, cumulative storage capacity across the region will expand from 2.5 GW in 2025 to 34 GW by 2035 – a 13-fold increase representing a 30% compound annual growth rate (CAGR) over the decade.

This represents a substantial upward revision from the previous forecast. In September 2025, Wood Mackenzie projected the market would reach 23 GW by 2034 with an 8% CAGR. The accelerated outlook reflects three key drivers: accelerating tender activity, rising renewable curtailment, and aging transmission infrastructure.

As Pamela Morales of Wood Mackenzie put it: “Latin America is no longer a frontier market for energy storage, it is an active one.” However, she cautions that “deployment could stall without comprehensive regulatory frameworks and clear remuneration mechanisms”.

Chile: The Regional Leader

Chile remains the undisputed leader in Latin American energy storage, hosting the region’s largest operational BESS projects. High levels of renewable curtailment – which have already cost developers more than half a billion dollars since 2022 – continue to support investment in longer-duration storage systems.

However, Wood Mackenzie identifies an emerging risk: price cannibalization in northern Chile as battery capacity increases, which could reduce revenues from energy arbitrage.

Mexico: At a Policy Inflection Point

Mexico is at a critical inflection point, driven largely by energy policy. Two mechanisms – a strategic project tender and a joint development scheme with the Federal Electricity Commission (CFE) – are expected to award more than 3 GW of storage capacity by 2030.

In July 2026, Mexico’s strategic project call established an indicative target of 935 MW of standalone storage (all with three-hour duration) across multiple regions. Additionally, the country’s Electric Sector Development Plan includes a 30% storage mandate for new renewable projects.

Brazil: The Auction Catalyst

Brazil is preparing for a step-change in storage deployment with its first dedicated capacity reserve auctions for large-scale battery systems, scheduled for December 2 and 4, 2026.

The first auction will be reserved for projects meeting domestic manufacturing requirements, while the second will be open to all systems. Contracts will run for 15 years with supply commencing August 1, 2028, and projects must have at least 30 MW of power capacity and four hours of duration.

Wood Mackenzie expects these auctions to accelerate Brazilian capacity additions from 2028, though it warns that financing could remain constrained without clear remuneration mechanisms.

Argentina: Building a Standalone Market in Record Time

In just over a year, Argentina has established a standalone storage market through tenders. Recent rounds awarded a combined 1.3 GW of standalone storage (officially 1,413.5 MW: 713 MW from AlmaGBA and 700.5 MW from AlmaSADI). These projects are primarily designed to relieve constraints at critical grid nodes and provide power and reserve services while transmission network upgrades are underway.

Dominican Republic: The Caribbean’s Structured Pioneer

The Dominican Republic stands out as having one of the most structured regulatory frameworks in the Caribbean. Regulations require that new renewable projects of at least 20 MWac include storage equivalent to at least 50% of installed capacity with a minimum four-hour duration. The country has set a storage target of 500 MW by 2030.

The Missing Piece: Bankable Revenue Models

Despite the impressive growth projections, Wood Mackenzie identifies a critical obstacle: the lack of bankable revenue models. In many markets, remuneration for ancillary services, energy arbitrage, or capacity remains undefined. These challenges are compounded by financing constraints, permitting delays, and a limited number of offtakers capable of supporting long-term contracts.

“Latin America still needs to find a balance between mandates and incentives to develop the market,” Morales said. She added that countries with bankable revenue frameworks would be better positioned to convert announced project pipelines into operational assets over the next decade.

Sunlink’s Perspective: Positioning for the Storage Boom

At Sunlink, we see Latin America’s storage surge as one of the most significant opportunities in the global energy transition. The 13-fold growth projected by Wood Mackenzie will create substantial demand for integrated solar-plus-storage solutions across the region.

For developers and EPCs: The window of opportunity is opening rapidly. Early-mover advantage in countries with established regulatory frameworks – particularly Chile, Brazil, and the Dominican Republic – could be decisive. Hybrid solar-storage projects are becoming the new standard, and developers who can integrate both seamlessly will have a competitive edge.

For investors: The shift from frontier to “active market” status signals maturing risk-reward profiles. However, the absence of bankable revenue models in many markets means careful due diligence is essential. Countries with clear remuneration mechanisms will attract capital faster.

For equipment suppliers: The 34 GW target by 2035 represents a massive addressable market for BESS equipment, inverters, and balance-of-plant components. Suppliers who can offer integrated solutions with proven performance in Latin American grid conditions will be well-positioned.

For the industry as a whole: The storage boom is being driven by real system needs – grid constraints, renewable curtailment, and the need for flexibility. This is not speculative growth; it is infrastructure necessity. The challenge is ensuring that regulatory frameworks keep pace with the project pipeline.

Conclusion

Wood Mackenzie’s 34 GW forecast for 2035 marks a turning point for Latin America’s energy storage market. Chile leads, Mexico and Brazil are scaling rapidly, Argentina has built a market from scratch, and the Dominican Republic offers a structured regulatory model for the Caribbean.

But the real test lies ahead. Without bankable revenue models, many announced projects may never reach operation. The countries that succeed will be those that move beyond mandates to create clear, predictable compensation mechanisms for storage services.

At Sunlink, we are ready to support this transformation with integrated solar and storage solutions designed for Latin America’s diverse markets – from utility-scale BESS in Chile to hybrid systems in Brazil and beyond.

Ready to capture the Latin American storage opportunity? Contact Sunlink to discuss our integrated PV and BESS solutions for the region’s fastest-growing markets.