Policy-backed regulatory reforms in Brazil and Chile are accelerating the adoption of grid-interactive buildings, energy management systems (EMS), and on-site storage across South America, creating structured procurement opportunities for building automation and energy-technology suppliers.
Background
Buildings in Latin America are transitioning into strategic infrastructure assets as countries pursue 2050 net-zero goals - a process requiring deep transformation of energy systems through digitalization, full electrification, and autonomous grid interaction.1Power Generation, Transmission & Distribution 2025 - Brazil | Global Practice Guides | Chambers and Partners The urgency is reinforced by scale: the building sector accounts for roughly 30% of global energy consumption and 40% of CO₂ emissions.2Brazil Energy Curtailment
Despite this potential, smart building adoption across the region remains uneven. According to Siemens' Infrastructure Transition Monitor 2025, Chile leads South America with 28 smart buildings per million inhabitants, outperforming Brazil at just 7 per million. Both countries are now working to close that gap through coordinated regulatory and investment frameworks.
Brazil has already exceeded its goal of generating 84% of its electricity from renewable sources by 2030. However, that renewable dominance has created system-level stresses. The country's electricity sector faces a structural rise in renewable energy curtailment, with related losses exceeding USD 370 million in 2025, according to analysis published by the U.S. Commercial Service.
Regulatory Drivers and Market Details
Brazil's government has responded with two parallel regulatory moves targeting grid flexibility. Officials confirmed the country will proceed with its first reserve capacity auction for battery energy storage systems (BESS), known as LRCAP Storage - a key step in integrating grid-scale storage into an electricity system increasingly dominated by variable renewables such as wind and solar PV. The federal government plans to launch the tender in April 2026, targeting 2 GW (~8 GWh) of capacity and mobilizing over USD 2 billion in procurement.
Law No. 15,269, enacted in November 2025, formally recognizes energy storage as an independent activity within Brazil's electricity sector, enabling dedicated rules for its operation, remuneration, and market participation. The legislation also creates mechanisms to promote BESS deployment, including the possibility of reducing import tax to zero and inclusion in REIDI, with an annual tax waiver limit of R$1 billion between 2026 and 2030.
On the demand side, Brazil's national electricity system operator (ONS) is tying grid-access conditions directly to building-level flexibility. For large commercial and industrial consumers such as data centers, ONS increasingly favors projects that incorporate load modulation, demand-response capability, on-site generation, or behind-the-meter energy storage. The International Energy Agency, in its first dedicated review of Brazil's energy policy, states that investing in system flexibility - through storage, demand-side response, and grid modernization - will be essential to ensure reliability and resilience as variable renewables expand rapidly.
In Chile, a February 2025 grid failure sharpened the policy impetus. A massive power outage on 25 February 2025 affected nearly 8 million homes across a 2,400 km corridor, exposing vulnerabilities in the national electricity system and underscoring the need for storage and resilience investment at the distribution level. According to Chile's Ministry of Energy, investment in the energy sector rose 32% in 2025, driven by storage projects supported by favorable regulation; BESS discharge volumes grew from 0.5 GWh per year in 2022 to 315 GWh between January and August 2025.
Chile's regulatory framework also identifies substantial opportunity for investment in demand-side response technologies, which could reduce consumption while providing valuable grid flexibility. In October 2025, Chile was approved to join the Andean Regional Electricity Market, initiating accession to a framework governing energy exchange with Peru, Bolivia, Ecuador, and Colombia - a development with direct implications for cross-border technology harmonization.
For building automation system (BAS) and EMS vendors, interoperability remains a central challenge in regional deployment. The industry continues to struggle with closed systems, fragmented data, and incompatible protocols. A Siemens-Latinometrics report highlights an urgent need to increase investment in smart meters, noting that in emerging markets this infrastructure must quadruple by 2030 to maintain a path toward net-zero emissions. Brazil's building performance standard ABNT NBR 15,575 - published in 2013 and revised in 2021 - remains the primary regulatory reference for commercial building energy compliance, though the country is actively updating its energy efficiency framework to incorporate Nearly Zero Energy Building (NZEB) classifications.
Outlook
According to Brazil's National System Operator (ONS), the national grid could face a power deficit in 2026 ranging from 2,320 MW under favorable conditions to 5,154 MW in a worst-case hydropower scenario - a projection expected to reinforce procurement of both grid-scale storage and building-level demand-response capabilities. According to Siemens' Infrastructure Transition Monitor 2025, 58% of organisations in the sector consider autonomous building systems essential for reducing greenhouse gas emissions, and 51% anticipate significant investment in this area within the next year. Vendors supplying BAS, EMS, IoT controllers, and BESS integration services that can demonstrate demand-response readiness and compliance with open protocols such as BACnet will be best positioned to capture procurement activity as both markets formalize their regulatory frameworks through 2026 and beyond.
