The contract asks a different question. In Brazil's capacity reserve auction for storage (LRCAP 2026), the energy of each cycle is the contracted power times four hours, considering the losses declared and verified at the individual metering point (PMI)[1]. In commercial and industrial (C&I) projects, the question is even more direct: how much the customer's energy bill went down at the utility meter.
Between the label and the metering point there is a path, and every step along that path consumes energy.
Where the energy is lost
To leave the cell and reach the grid, energy goes through the power conversion system (PCS), which turns direct current into alternating current, through the transformer, which steps up the voltage, and through the cables up to the connection point. When charging, the path is reversed and the losses happen again. On top of that, the system powers its own equipment: air conditioning or liquid cooling, BMS, EMS, controls, UPS, lighting and fire protection.
Each loss looks small on its own. Together, they explain why the round-trip efficiency of a lithium-ion system usually falls between 85% and 95%, depending on the architecture and equipment[2], while the efficiency of the cells alone is higher.
In the LRCAP, the yardstick is at the PMI
Ministry of Mines and Energy Ordinance (Portaria Normativa MME) No. 136/2026[1] made clear where energy is measured. The table summarizes what this means for the project.
| What the rule says | What it means for useful energy |
|---|---|
| Minimum total efficiency (RTE) of 85%, measured at the PMI, throughout the contract term (Art. 7, item VI) | The 85% is not the cell's or the PCS's. It is the whole system's, measured at the connection point, for 15 years. |
| Full cycle: contracted power times four hours, considering the losses declared and verified at the PMI (Art. 4, § 5) | The energy to be delivered in each cycle is measured after all losses. Installed capacity must cover that gap from day one. |
| Charging and discharging energy settled in the spot market, with charging costs covered only up to injected energy divided by the RTE; the excess is paid by the project owner (Art. 9, §§ 6 to 8) | Consumption above that limit is paid by the project owner. Every efficiency point below the declared value becomes a cost. |
| Electrical losses in the dedicated system, from the PMI to the busbar of the substation connecting the project to the national grid (SIN), are the sole responsibility of the project owner (Art. 9, § 9) | Besides the losses before the PMI, which are already part of the RTE, the losses on the dedicated line after the PMI also belong to the project. There are losses on both sides of the PMI, and both belong to the project. |
The technical note with which ANEEL's staff closes the public consultation on the auction notice, dated 24 October[6], proposes to settle the remaining questions. Efficiency is to be calculated every month, with no offsetting between good and bad months, on all the energy measured at the PMI, including auxiliary services and standby consumption. Only a month with fewer than four injections is exempt. In the note's own words, temperature, auxiliary consumption and standby time must be considered when forming the bid. The final notice depends on the vote of ANEEL's board, but the direction is set: the yardstick is at the PMI, and everything that happens before and after it, up to the connection substation, is the responsibility of whoever places the bid.
The consumption that never switches off
Auxiliaries deserve special attention because they do not depend only on how much the battery works. They depend on the climate and on time.
A study published in 2026 followed a 14.7 MW / 8.8 MWh LFP battery plant in Sardinia, Italy, for more than a year[3]. The auxiliaries consumed between 8.5 and 72 kW, with an average of 29 kW, and that consumption never reached zero, not even when the battery was idle, which was about 80% of the time. Ambient temperature explained consumption better than the battery's own operation. On low-use days, the auxiliaries' share of daily energy came close to 100%, with a median of 4.5%.
In another case, a field test by the US Pacific Northwest National Laboratory (PNNL) on a flow battery[4] showed the difference in the measurement itself: with auxiliaries included, round-trip efficiency at the meter dropped from 68% to 75% to between 54% and 63%. It is a different technology from lithium, but the lesson applies to any system: where you measure changes the number.
For a project in Brazil's Northeast, with high temperatures all year round, this weighs more than in Europe.
An illustrative calculation
To give an order of magnitude, imagine a container that delivers 4 MWh per cycle at the metering point. Assume 95% round-trip efficiency in the cells, and 98.5% in the PCS and 99.3% in the transformer in each direction. Without auxiliaries, round-trip efficiency would be about 91%. Now add 15 kW of auxiliaries, an intermediate value for a 5 MWh container in a hot climate[5], running 24 hours a day.
| Operating regime | RTE at the metering point |
|---|---|
| No auxiliaries, any regime | about 91% |
| Two cycles per day | about 87% |
| One cycle per day | about 84% |
| One cycle per day, with 20 kW of auxiliaries (hotter days) | about 82% |
| One cycle every two days | about 78% |
The figures are illustrative and do not represent any specific equipment. But they show the central point: efficiency at the PMI depends on how much the grid operator (ONS) dispatches the battery. The fewer the cycles, the greater the weight of the auxiliaries, and the auction caps operation at 366 full cycles per year, with no guarantee that all of them will happen: ANEEL's technical staff proposed rejecting a request for minimum cycling[6]. And because efficiency is calculated monthly, a weak dispatch month is not offset by a strong one.
In C&I, the meter is the customer's
In commercial and industrial projects there is no contract requiring 85% efficiency. But there is an equally objective yardstick: the utility meter. Useful energy is the energy that reduces billed demand and consumption.
Here, auxiliaries are almost always fed from the customer's own installation. Cabinet cooling shows up on the energy bill every month, including the days when the battery does nothing. For a backup system, which may spend weeks waiting for a power outage, auxiliary consumption can exceed the energy the battery delivers.
There is also a reading detail. Many commercial equipment datasheets report energy in direct current, and some also show usable energy, which is already lower. Neither is the energy at the metering point. A savings calculation based on the label number promises more than the system will deliver.
Questions before closing
Before closing the sizing or the bid, I would try to answer these six questions:
- Is the energy reported by the supplier nominal or usable, and where is it measured: DC, PCS output or connection point?
- Does the reported efficiency include the transformer, cables and auxiliaries, or only the cells and the PCS?
- Where will the auxiliaries be fed from, and does that consumption pass through the metering point?
- How much do the auxiliaries consume when the battery is idle, and how does that value change with the site's temperature?
- What operating regime was assumed in the efficiency calculation, and what happens to it if dispatch is lower?
- Does the installed capacity cover the energy required at the metering point from day one, after losses and degradation?
The label tells you how much the battery stores. The metering point tells you how much the project delivers. Revenue, penalties and savings are all calculated on that second number.
Kyklios is an independent pre-investment engineering firm for energy storage systems, with its own degradation model. We help developers, investors and suppliers test the assumptions that turn into revenue or penalties before they sign.
Sources
- Brazilian Ministry of Mines and Energy. Portaria Normativa MME No. 136, of June 1, 2026 (in Portuguese). Official Gazette, June 3, 2026. Art. 4, §§ 3 and 5; Art. 7, item VI; Art. 9, §§ 6 to 9.
- pv magazine Brasil. Desempenho global do sistema de armazenamento será determinante para competir no leilão, aponta Greener (in Portuguese). June 29, 2026.
- Dimovski et al. Data-Driven Modeling of Auxiliary Consumption in Utility-Scale BESS. Batteries (MDPI), vol. 12, no. 8, 288, 2026.
- Pacific Northwest National Laboratory. PNNL-28478. 2019. Table 5.
- B. S. Rathore. BESS 5 MWh Aux consumption. Energy Central. Market reference used as an order of magnitude (11 to 22 kW for a liquid-cooled 5 MWh container, depending on climate).
- Brazilian Electricity Regulatory Agency (ANEEL). Joint Technical Note No. 17/2026-SEL-SGM/ANEEL, 24 October 2026 (in Portuguese). Analysis of the contributions to Public Consultation No. 22/2026 and proposed notice for Auction No. 05/2026-ANEEL. Case 48500.015992/2026-11, SEI document 0492975. §§ 14, 264 to 270, 273 to 277, 282 and 324 to 327. Staff proposal, pending the board's decision.
The figures in the illustrative calculation are a Kyklios calculation based on the assumptions stated in the text and do not represent any specific equipment.