The decision by the MME (Ministry of Mines and Energy) to suspend the Capacity Reserve Auction in the form of Power (LRCAP 2025) was well received by agents in the electricity sector, who considered the measure prudent in view of the growing judicialization of the process. The assessment is that continuing with the auction could compromise its results and generate legal uncertainty.
For Mário Menel, president of FASE (Forum of Associations of the Electric Sector), the government had no alternative. “Judicialization would take longer,” he said. The expectation now is that the government will open a public consultation to discuss adjustments to the rules before publishing the notice.
Alexandre Viana, CEO of the consulting firm Envol Energy, stated that the market was already considering the possibility of postponing the deadlines, but had not counted on the cancellation of the auction. “Cancelling and then reopening the auction generates apprehension among industry players, who fear that the event will not take place this year. The expectation, however, is that it will be held in 2025, as the system needs this energy.”
Energy lawyer Urias Martiniano drew attention to the impacts of the cancellation on the sector's planning. According to him, the decision could compromise the work of the Energy Research Company (EPE), which is responsible for projecting future hiring needs.
“If CCEAR contracts are expiring, as will happen now, and at the same time there is a need to contract existing energy, the risk is not only long-term — it is also short-term. We are talking about the country’s energy security. The government needs to understand the importance of these issues for the sector. We have an extremely strong sector, but the lack of planning and organization of institutions ends up penalizing an area that could develop much more,” said Martiniano.
Auction cancellation creates uncertainty in the market
O auction was initially scheduled to take place on June 27. Since the notice must be published at least 30 days in advance, the government would have until May 26 to resume the process within the regulatory schedule. If this does not happen, it will be necessary to set a new date for the contest.
The LRCAP 2025 foresees the contracting of ten products: six for existing thermoelectric plants, three for new thermal plants and one for hydroelectric plants, with supply between 2025 and 2030. According to EPE, 87 biofuel thermoelectric plants (6.963 MW), 228 natural gas thermoelectric plants (61.635 MW) and 12 HPP expansions (5.476 MW) were ed.
The challenge now will be to find space in the calendar. Auctions are already scheduled for August (A-5), September (Isolated Systems), October (transmission) and December (A-1 and A-2). “In the end, it is more market uncertainty about when the auction will be held,” said Pedro Dante, partner at Lefosse Lawyers.
all the content of Canal Solar is protected by copyright law, and partial or total reproduction of this site in any medium is expressly prohibited. If you are interested in collaborating or reusing part of our material, please us by email: [email protected].
