Latin America’s energy storage capacity set to surge to 34 GW by 2035

Wood Mackenzie has significantly raised its forecast for Latin America’s energy storage market. The research firm expects cumulative storage capacity in the region to increase from 2.5 GW in 2025 to 34 GW in 2035—a 13.6-fold rise over the course of a decade. The new figures come from the “Latin America Energy Storage Outlook 2026” report.

Significant upward revision

The new forecast represents a substantial revision from the previous edition of the report. In September 2025, Wood Mackenzie projected that the Latin American market would reach 23 GW by 2034, with a compound annual growth rate of 8%.

At the time, the company identified grid constraints, rising renewable energy curtailment and auctions as the main drivers of energy storage development. As Pamela Morales of Wood Mackenzie put it, Latin America is no longer an emerging energy storage market—it is an active one. The project pipeline is growing rapidly, but the deployment of new installations is stalling in the absence of comprehensive regulatory frameworks with clear remuneration mechanisms.

Chile remains the regional leader but faces a new risk

Chile remains the regional leader and currently has the largest operational energy storage projects in Latin America.

According to analysts, high levels of renewable energy curtailment continue to support investment in longer-duration systems. However, Wood Mackenzie points to a new risk: price cannibalisation in northern Chile, resulting from the growth in installed battery capacity, which could reduce energy arbitrage revenues.

Mexico reaches a turning point driven by energy policy

According to the analysis, Mexico is now at a turning point driven primarily by energy policy. Wood Mackenzie estimates that new mechanisms for strategic projects and joint development programmes with the state-owned utility CFE, including energy storage, could result in the award of more than 3 GW of capacity by 2030.

In July, Mexico’s call for strategic projects set an indicative target of 935 MW of standalone energy storage, all with a three-hour duration, located in the Baja California, Baja California Sur, Northern, Northwestern, Eastern, Western and Peninsular regions. This figure is indicative and does not constitute a cap on submitted projects.

In addition, according to Wood Mackenzie’s analysis, the Electricity Sector Development Plan introduces an energy storage requirement equivalent to 30% of the capacity of new renewable energy projects.

Brazil prepares for a step change in scale

Brazil is also preparing for a sharp increase in market scale. The country will hold its first two capacity reserve auctions dedicated to utility-scale battery systems on 2 and 4 December 2026.

The first auction will be reserved for projects that meet domestic component manufacturing requirements, while the second will be open to all other systems. Contracts will run for 15 years, with deliveries beginning on 1 August 2028. Installations will be required to have a minimum capacity of 30 MW and a four-hour duration.

Wood Mackenzie expects the auctions to accelerate capacity additions in Brazil from 2028 onwards, although it warns that access to financing will remain limited until sufficiently clear and predictable remuneration mechanisms are introduced.

Argentina’s rapidly growing standalone storage market

In just over a year, Argentina has developed an auction-backed market for standalone energy storage. The Wood Mackenzie report estimates recently awarded capacity at approximately 1.3 GW, while available official data indicate a total of 1,413.5 MW. The AlmaGBA auction awarded 713 MW, while a further 700.5 MW was awarded through AlmaSADI.

These projects are primarily intended to ease constraints at key grid nodes and provide capacity and reserve services while the transmission network is being modernised.

The Dominican Republic has one of the region’s more advanced regulatory frameworks

The report identifies the Dominican Republic as one of the Caribbean markets with a more advanced regulatory framework. Under local regulations, new renewable energy projects with a capacity of at least 20 MWac must include energy storage equivalent to at least 50% of their installed capacity and providing a minimum duration of four hours.

Wood Mackenzie also points to a national energy storage target of 500 MW by 2030.

The main barrier is the lack of bankable revenue models

Despite the expected growth, the research firm identifies the lack of bankable revenue models as the main obstacle facing the region.

In many markets, remuneration for ancillary services, energy arbitrage and capacity availability has yet to be clearly defined. Additional challenges include financing constraints, permitting delays and a limited number of offtakers capable of entering into long-term contracts.

As Pamela Morales concluded, Latin America must find a balance between regulatory mandates and market incentives to support market development. In her view, countries with bankable remuneration mechanisms will be better positioned to turn announced project pipelines into operational assets over the next decade.