Brazil’s Capacity Auction Faces Probes as Regulator Freezes Approval

Overview

• The reserve‑capacity auction, held March 18, 2026, is under investigation by antitrust regulator Cade and the federal audit court TCU after the Federal Prosecutor’s Office asked the judiciary to halt the process, and Aneel has suspended formal approval while it waits for a decision.
• The auction contracted 19 GW of firm power, a volume larger than the Itaipu hydropower plant, with press estimates of R$515 billion in availability payments over 15 years and potential total consumer costs above R$800 billion once plants are dispatched.
• One focal point is the Energy Ministry’s 72‑hour revision that doubled the price cap for existing plants to R$2.25 million per MW per year, a change Minister Alexandre Silveira called a correction of an initial error.
• Large incumbents emerged as major winners, with reports that Eneva could earn about R$134 billion over 15 years and Petrobras about R$44 billion, while critics say the design favored fossil thermal units and excluded battery storage that could relieve peak demand.
• The ministry defends the process as legal and necessary and says batteries will be bid in a separate 2026 tender, while opinion columns split between warnings of higher bills and fossil lock‑in and arguments that the auction helps prevent blackouts and could add only R$4 to R$6 to a typical monthly bill.