Suspension of Capacity Auction Generates Uncertainties in the Brazilian Electric Sector

On Tuesday (April 1), the Federal Court of the Federal District decided to suspend the Capacity Reserve Auction (LRCAP 2025), which was scheduled to take place on June 27. This decision, made by Judge Diego Câmara of the 17th Federal Court, was a response to a lawsuit by Proteste, an organization focused on consumer rights, which questions the legality of the process and its impact on users.

Suspension of Capacity Auction Generates Uncertainties in the Brazilian Electric Sector

According to Proteste, the method proposed for contracting the reserve capacity was defined without adequate public debate and may incur extra costs that lack technical justifications. This new approach was stipulated in Ordinance No. 100, published on February 7, 2025. In contrast, the first capacity auction, held in 2021, was extensively discussed with society, generating expectations of transparency and public participation.

The judge, in accepting Proteste's request, emphasized the importance of public consultation regarding the new approach, including the method for calculating prices. He ordered the Ministry of Mines and Energy (MME) to conduct this consultation before reissuing the regulation.

So far, the MME has not commented on the judicial decision. However, the suspension of the auction is being closely monitored by the electric sector. Experts warn that the situation could have significant implications for Brazil's energy security.

Pedro Dante, an attorney specializing in energy, highlighted that it is common for first-instance decisions to be contested. He believes that the MME may appeal this decision, considering the importance of the auction for power contracting. "The ideal scenario is for the Ministry to seek to suspend the decision, as all preparations for the auction were already underway and a date for the announcement was established," he commented.

The LRCAP 2025 is a historic milestone, being the second auction of its kind in Brazil, reflecting discussions that began in March 2024. The aim is to contract additional power from thermal and hydropower plants to meet the growing demand anticipated between 2025 and 2030, which is crucial for ensuring the stability of the electric sector during peak load periods.

In summary, the suspension of the auction raises an alert in the electric sector, necessitating a deep reflection on the management of energy resources and the participation of society in decisions that directly impact consumers' daily lives. EnergyChannel will continue to monitor updates on this topic and its developments.

Suspension of Capacity Auction Generates Uncertainties in the Brazilian Electric Sector