ONS Says March Capacity Auction Falls Short as Solar Oversupply and El Niño Raise Risks

Overview

• ONS director Alexandre Zucarato told attendees at Enase on Wednesday that the March reserve-capacity auction, which contracted roughly 19 GW, helped but does not fully meet the system’s power needs at times of fast evening ramps when solar output falls.
• The operator has already used its emergency excess-energy plan once to cut output, requesting 1,000 MW of managed reductions between 10:00 and 14:00 on June 7 to keep the grid stable during a midday oversupply.
• Rising distributed and central solar generation has deepened the 'duck curve' by lowering daytime net demand and creating larger evening ramps, which increases both the frequency of curtailments and the need for fast-response capacity.
• To guard peak supply against a possible strong El Niño that could dry Northern basins, ONS will keep Itaipu and southern reservoirs as full as possible through mid-September and may call more expensive thermal plants or seek CMSE approval for out-of-merit dispatch if needed.
• As medium-term fixes, ONS plans a December battery auction and recommends market and tariff signals and transmission use changes to better absorb daytime solar and lower the need for forced cuts, with impacts on costs and consumer bills if thermal generation rises.