By Brazil Stock Guide – WEG (B3: WEGE3) is expanding its focus on battery energy storage systems (BESS) as grid congestion and renewable curtailment increase in Brazil and other key markets. The company sees storage as a complementary business to its traditional portfolio of motors, transformers and power equipment, according to a recent research note by BTG Pactual.
Battery storage currently represents a small share of WEG’s roughly R$40 billion in annual revenue, but demand is rising as solar and wind capacity grows faster than transmission infrastructure. Brazil is expected to add about 76 gigawatts of renewable generation by 2035, increasing pressure on the grid and leading to higher levels of forced curtailment, particularly in the country’s northeast.
Regulatory changes are also supporting the expansion of storage. A law approved in late 2025 formally classified energy storage as infrastructure, allowing batteries to participate across generation, transmission, distribution and power trading. In addition, Brazil’s 2026 capacity reserve auction is expected to contract grid-scale battery systems under long-term agreements, providing revenue visibility for suppliers.
WEG does not manufacture battery cells but integrates systems combining inverters, transformers, control equipment and energy management software. Analysts estimate the company holds more than half of Brazil’s installed BESS capacity, while its international presence remains smaller but is expanding, particularly in the United States and Chile.
BTG estimates that energy storage could add around 4% to WEG’s long-term EBITDA, a contribution not fully reflected in current valuation models. The bank maintains a buy recommendation on the stock, citing WEG’s balance sheet strength and exposure to long-term grid investment trends.
Leave a Reply