The Brazilian electricity sector continues its path of progress and setbacks that reveal how certain dilemmas are repeated in new guises.
Throughout the first months of 2025, different episodes helped to create a scenario marked by frustrated expectations, contradictory movements and still unclear economic signals about the best paths to follow.
With unfulfilled promises, contested decisions and institutional disputes, a picture of uneven evolution is emerging — with lessons learned and others that continue to slip away and get lost along the way.
In this brief overview, we propose a reading of some of these recent movements, without the intention of exhausting them, but with the aim of connecting the dots that today reveal the central tensions in the sector.
The suspended capacity reserve auction: an initial regulatory frustration
The beginning of 2025 was marked by expectations surrounding the Capacity Reserve Auction, scheduled for June, which could have represented an important step in restoring the electrical security of the system — through the contracting of firm power, especially from dispatchable sources.
However, the the conduction of the contest was interrupted by court decision that accepted the thesis of lack of specific public consultation on its rules, understanding that there was a procedural violation in light of the principles of broad participation of agents and the legitimacy of istrative acts.
However, on the subject of power reserves, not everything was bad. The possibility of a new competition focusing on energy storage remains on the regulatory radar, the modeling of which could represent a significant advance for the viability of BESS projects in the country.
It is worth ing that the Public Consultation No. 39/2023, from which Technical Note No. 266/2024 of the ANEEL, which consolidated the technical basis of studies on the role of storage in the sector — but still without normative development.
There are still important gaps regarding the structuring of the model applicable to storage systems, both in of network access and granting, as well as in the definition of charges and forms of remuneration.
In other words, although the topic remains present on the institutional agenda, the absence of clearer regulatory guidelines has been inhibiting investment decisions and making it difficult to consolidate viable business models for storage.
The moment requires not only continuity in studies, but the definition of minimum regulatory frameworks that provide legal certainty and allow unlocking the strategic role of storage in the Brazilian electricity sector.
Curtailment: regulatory reviews and the bill that threatens to return
The compulsory reduction of generation — the so-called curtailment — remains in the spotlight in 2025 – as it was in 2024 – especially given the continued great influence of renewable sources in the system and the dysfunctional expansion of restrictions demanded by the ONS.
As is widely known, Normative Resolution No. 1.030/2022 of the ANEEL established three distinct modalities that can lead to generation cuts: due to external unavailability, due to electrical reliability and for energy reasons.
The rule, although innovative at the time, began to be subject to tension due to the increase in the number of affected agents and the absence of a clearer economic treatment for the effects of these limitations.
Other aspects, such as the “5% or 5 MW” criterion set out by the ONS, accentuate the rigor of the operational rules, while reducing the scope for compensation — which has been bad news for generation companies, which, as far as we know, have made a herculean effort to operate in the face of the new systemic reality.
Within the scope of public consultation, the ANEEL seeks to revisit the logic of compensation and improve the parameters that underpin reasonable dispatch decisions — or their restriction.
The technical debate has already begun and points to the need to better calibrate planning instruments, in order to mitigate the financial effects that currently fall asymmetrically on certain agents.
On the other hand, the federal government is working on a different solution. The MME (Ministry of Mines and Energy), in conjunction with entities and associations in the sector, has begun to consider the possibility of treating the impacts of curtailment as a cost to be absorbed by means of the System Service Charge (ESS).
The proposal, still being formulated, would involve the socialization of these values among consumers, without the need to open a sectoral credit line — as has occurred in exceptional situations in the past — or formal renegotiation between agents.
The solution, however, is not yet consensual. The ANEEL has not signaled agreement with this approach, warning of the tariff impacts and the risk of emptying the logic of individual responsibility that historically guides sectoral regulation — especially with regard to the allocation of risks among agents.
If it goes ahead, the proposal could generate significant tariff effects and add another level of pressure on inflation, in a context in which other increases are already on the horizon.
The issue remains ongoing, but it reveals a concern that goes beyond the technical debate: how to finance the imbalances in the operation without breaking with the structuring principles of the sector?
The MME and the paradoxes of the reform of the electricity sector
The search for a more modern and efficient electricity sector has been a recurring theme in official statements. In practice, however, we observe a succession of measures and speeches that do not always align.
The coexistence of ambitious goals and fragile institutional structures raises doubts about the real viability of some of the proposals under discussion.
One of the most sensitive points is the announced opening of the market to low-voltage consumers. The proposal resonates with the expectation of greater freedom of contracting, but it comes up against concrete technical limitations: the lack of adequate measurement, the fragility of the portability mechanisms and the lack of infrastructure to the massification of the operation already limit the practical applicability of the measure.
At the same time, there are signs of expanding tariff benefits, such as the proposed exemption for consumption of up to 80 kWh by low-income families and the reinforcement of mechanisms aimed at the vulnerable population.
Even if these measures find social , their funding through cross-transfers increases the pressure on consumers who do not benefit — especially in a scenario of rising energy inflation.
The panorama becomes even more complex in light of the discussion on the repositioning of sectoral charges. Behind the scenes, the proposal to redistribute financial obligations is gaining strength, increasing the responsibility of the free market for certain systemic costs.
The measure, if implemented, could compromise the attractiveness of this environment — precisely at the moment when we are trying to boost it.
The lack of coherence between these directions compromises the clarity of the signals that should guide investments and the organization of the sector. Modernization, so often mentioned, requires more than good intentions or well-formulated slogans.
It requires alignment between technical, institutional and economic objectives, as well as a willingness to address distributive tensions in a transparent and predictable way.
The old one Bill No. 414/2021, which served as the conceptual basis for the proposal recently sent to the Civil House, has not yet reached its own conclusion — at least in relation to the main points it sought to address. In the meantime, the sector continues to operate through normative patches, specific compensations and often reactive decisions.
The risk is that the promise of transformation will once again be diluted by short-term measures. Is it still possible to talk about modernization without opening up space for voluntary exchanges, consistent economic signals and solutions that are less dependent on centralized political decision-making — and the usual parade of riders that usually accompanies any reform proposal?
The opinions and information expressed are the sole responsibility of the author and do not necessarily represent the official position of the author. Canal Solar.
