The energy storage market in Latin America will reach 23 GW by 2034.
Over the next decade, Latin America is set to become one of the most dynamic energy storage markets in the world. According to the latest Wood Mackenzie report, Latin America Energy Storage Outlook 2025, the region is expected to reach 23 GW of cumulative storage capacity by 2034. The compound annual growth rate (CAGR) is projected at 8%.
Chile – a leader in the energy transition
The most prominent player in Latin America’s energy storage landscape is Chile. The country has long invested in modern regulations supporting the development of renewable energy sources (RES) and energy storage systems. Today, Chile accounts for nearly half of the region’s total storage capacity, thanks to forward-looking regulations and coherent strategies for integrating renewables into the grid. Moreover, it is considered a global innovation laboratory, testing settlement models, auctions, and long-term contracts for energy storage.
Mexico and the Dominican Republic – two different development scenarios
Following Chile are Mexico and the Dominican Republic, both taking very different approaches to energy storage development. Despite its large solar potential, Mexico faces regulatory barriers that slow down investment, especially in the large-scale segment. By contrast, the Dominican Republic is developing at an impressive pace, focusing on rapid deployment of hybrid projects and centrally controlled energy storage systems.
The strength of large-scale projects and hybrid integration
The report indicates that the large-scale segment dominates the region. In Central America and the Caribbean, this mainly involves standalone projects (independent battery systems operating for grid operators). In Mexico and South America, hybrid systems combining solar PV with energy storage are increasingly important. The commercial and industrial sector also shows significant potential and could become a key area for energy storage deployment by the mid-2030s.
Latin America has some of the world’s most ambitious climate goals. The high share of variable renewables creates growing challenges for system operators, from voltage fluctuations to reserve shortages during peak demand. Energy storage is becoming a fundamental tool for balancing the power system, enabling both grid services and price arbitrage.
Additionally, competitive auction processes and long-term energy plans in many countries already include storage targets, treating storage as an integral part of the sector’s transformation.
Regulatory and financial challenges
Despite impressive forecasts, the market faces several barriers. Many countries lack comprehensive regulatory frameworks, clear operational models, and remuneration mechanisms for services provided by energy storage (e.g., capacity reserves, frequency balancing). High investment costs and limited grid infrastructure further slow deployment.
Wood Mackenzie expert Pamela Morales emphasizes that the future of energy storage in the region depends on building solid regulations and removing barriers across the entire value chain.
According to the Latin American Energy Organization (Olade), about 2.5 GW of energy storage is currently installed in the region—1.5 GW of battery systems (BESS) and 1 GW from pumped hydro storage. Over the next decade, this represents nearly a tenfold increase in storage capacity.