Why will the judiciary be a key player in Brazil's new electricity matrix?

1. Introduction

The energy transition is often presented as a predominantly technological transformation: progressive replacement of fossil fuels, expansion of solar and wind power generation, digitalization of grids, electrification of transport, energy storage, demand response, and decentralization of production. This interpretation, while correct, is incomplete.

The energy transition is also a legal, regulatory, economic, and institutional transformation. Each new technology introduced into the electrical system requires rules regarding network access, remuneration, contracting, operation, pricing, liability, taxation, and risk distribution.

When these rules are insufficient, contradictory, altered during project execution, or applied unevenly, the conflict leaves the administrative sphere and enters the judicial system.

In Brazil, this movement tends to be especially intense. The country has an electricity grid with a high share of renewable sources and intends to significantly expand solar, wind, and distributed generation over the next decade.

The Ten-Year Energy Expansion Plan 2034 foresees maintaining the share of renewable sources at a level above 85% of the Brazilian electricity matrix, accompanied by growth in solar, wind and micro and mini distributed generation [1].

The same plan estimates that the Brazilian energy sector could receive up to R$ 3,2 trillion in investments by 2034, considering generation, transmission, oil, natural gas and biofuels [2]. This is an extraordinary economic opportunity, but it brings with it an inevitable question: what will be the degree of legal predictability of these investments?

For the financial market, the energy transition cannot be evaluated solely based on the technical potential of the projects.

Investors need to understand whether projected revenue will be preserved, whether connection rules will remain stable, whether contracts will be enforceable, whether the tariff calculated by the Administration will be respected, and whether any regulatory changes will have prospective or retroactive effects. In other words, the Brazilian energy transition depends on capital, but capital depends on trust.

This is where the Judiciary assumes a central position. Its decisions can preserve the stability of the sector, correct abuses, ensure rights, and contain illegal regulatory changes. However, they can also produce normative fragmentation, opportunistic incentives, asymmetries between agents, and systemic effects not considered in individual decisions.

The question, therefore, is not whether the energy transition will be subject to judicialization. It already is. The real question is how the Judiciary will exercise this leading role and what effects its decisions will have on the new Brazilian electricity matrix.

2. The energy transition expands areas of regulatory conflict.

The Brazilian electricity model has historically been structured around large-scale generation projects, centralized transmission, monopolized distribution, and predominantly passive consumption. The energy transition is changing this architecture.

Consumers begin to produce energy, store it, respond to tariff signals, and participate in collective generation structures. Distributors cease to act solely as suppliers and begin to manage a network with multidirectional flows.

Renewable energy generators face operational constraints, connectivity risks, and volatility in remuneration. Traders, aggregators, storage operators, and energy service providers are entering markets that are still undergoing regulatory development.

Herself - Host ANEEL (National Electric Energy Agency) recognizes that its role in the energy transition involves adapting sector rules to accommodate technologies such as storage and distributed energy resources, while simultaneously ensuring reliability, fairness in cost allocation and system security [3].

The greater the number of agents, technologies, and business models, the greater the number of legal relationships subject to regulation. And the faster the technological transformation, the greater the possibility that economic reality will advance before sufficiently clear rules are developed. This mismatch is one of the main origins of judicialization.

The disputes already encompass, among other matters, access to and connection of projects to distribution and transmission networks; the signing and execution of system usage contracts; the collection of charges; the validity of generation restrictions; the allocation of hydrological risks; the definition of tariffs; tax incidence; the classification of micro and mini-distributed generation; the application of the transition rules of Law No. 14.300/2022; the limits of the distributors' actions; and liability for delays or omissions in infrastructure implementation.

The Legal Framework for Distributed Microgeneration and Minigeneration, established by Law No. 14.300/2022, is a representative example of this dynamic [4]. The law created transition rules, regulated the Electricity Compensation System and sought to provide greater stability to the segment.

However, the practical application of the framework depends on regulatory acts, distributor procedures, interpretation of technical concepts, and compatibility with previous regulations.

Thus, even when the legislator seeks to create legal certainty, the implementation phase can generate new controversies.

Furthermore, there is a qualitative shift in litigation. Disputes in the electricity sector do not only involve bilateral conflicts. A decision seemingly restricted to a specific project can alter the order of access to the grid, affect consumer tariffs, redistribute costs, interfere with price formation, or compromise systemic operation.

The judicialization of the energy transition therefore has a collective and economic potential far greater than the individual value attributed to each case.

3. From administrative dispute to judicial process

Sectoral regulation is built upon an extensive normative chain. The Federal Constitution, laws, decrees, resolutions of ANEELNetwork procedures, marketing rules, concession contracts, bidding documents, and individual administrative acts form an interdependent system. In this environment, conflict can arise for various reasons.

The first is the regulatory gap. The technology or business model exists, but its regulation is not yet complete. Energy storage illustrates this situation.

Although recognized as a fundamental element for dealing with the variability of solar and wind sources and improving supply reliability, its economic integration depends on clear rules regarding authorization, connection, contracting, remuneration and simultaneous provision of services.[5]

The second reason is regulatory change. Infrastructure projects have long maturation and capital recovery periods. A regulatory change during implementation or operation can modify revenues, costs, or obligations originally considered in the financial model.

The third is interpretative divergence. Even when a rule exists, agents, concessionaires, and regulators may attribute different meanings to it. It is common for rights established by law to depend on technical concepts that only become concrete during administrative application.

The fourth reason is the asymmetrical behavior of regulated entities. Different distributors may apply different procedures to similar situations, creating regional inequality and uncertainty for companies operating nationally.

The fifth is procedural deficiency. Delays, lack of motivation, standardized responses, disproportionate documentary requirements, or administrative decisions incompatible with the regulatory process may lead the interested party to seek judicial protection.

The sixth reason is the inadequate transfer of risks. Contracts and regulations may allocate risks to the private agent over which it has no control, such as infrastructure delays, network unavailability, or operational restrictions determined by the system.

These situations demonstrate that judicialization does not always represent opportunistic resistance to regulation. In many cases, it functions as a mechanism for controlling administrative legality and protecting legitimate expectations.

On the other hand, there are also demands used to avoid sectoral obligations, postpone investments, avoid charges, or individualize benefits whose costs will be shared among the other market participants.

Distinguishing between the legitimate protection of rights and the strategic use of the judicial process will be one of the greatest challenges for the courts.

4. The role of the judiciary in the interpretation of the norms of ANEEL

A ANEEL It was created by Law No. 9.427/1996 and has the authority to regulate and supervise the production, transmission, distribution and marketing of electricity, in accordance with the policies and guidelines of the federal government [6].

Their work involves specialized technical knowledge and decisions that consider not only the interests of a particular agent, but also affordable tariffs, security of supply, the economic and financial balance of concessions, efficiency, universal access, and operational stability. This does not mean, however, that their actions are immune to judicial review.

The principle of the inalienability of jurisdiction, provided for in Article 5, item XXXV, of the Federal Constitution, ensures judicial review of injury or threat to a right.

The Judiciary can examine the Agency's competence, the legality of its actions, the observance of due process, the motivation, proportionality, reasonableness, and compatibility of regulatory norms with legislation. The difficulty lies in defining the depth of this control.

In predominantly technical matters, directly replacing a regulatory decision with a judicial choice can generate unforeseen effects. The judge analyzes a controversy defined by the parties, while the regulator must consider the systemic impacts on the market and consumers.

For this reason, case law has, in various instances, recognized the need for caution in judicial interference in technical decisions within the electricity sector.

In 2023, for example, the Presidency of the Superior Court of Justice suspended a preliminary injunction that had interfered with the calculation of the minimum value of the Settlement Price of Differences — PLD. The decision highlighted the risk of effects on public order and the economy resulting from the judicial alteration of the methodology established by the... ANEEL [7].

In another case, the STJ (Superior Court of Justice) suspended a decision that affected the holding of a transmission auction promoted by the Agency. The Court considered the economic relevance of the bidding process, which involved thousands of kilometers of lines and billions of dollars in investments, as well as the coordinated participation of... ANEEL, MME (Ministry of Mines and Energy), EPE (Energy Research Company), ONS (National System Operator) and TCU (Federal Court of Accounts).[8].

There were also decisions in which the STJ preserved criteria defined by the Agency for financial compensations and for the execution of sectoral contracts, given the risk of imbalance and multiplier effect on the market [9].

These precedents reveal a trend toward recognizing what is called technical-administrative deference. This deference, however, should not be confused with automatic submission to the regulator.

Deference is legitimate when... ANEEL Acting within its competence, observing the law, adequately justifying the decision, allowing for stakeholder participation, and demonstrating the technical rationale of the measure, judicial review ceases to represent undue interference and begins to fulfill its constitutional function.

The best judicial performance is not the one that accepts every decision of the Agency nor the one that systematically replaces the regulator. It is the one that controls the legality and rationality of the act without ignoring the technical complexity and systemic effects of the decision.

5. Legal certainty as infrastructure for the energy transition

The physical infrastructure of the energy transition consists of power plants, grids, substations, storage systems, digital equipment, and charging points. But there is an equally essential invisible infrastructure: legal security.

Projects in the electricity sector require significant capital investments and have a long-term return. The investor assumes risks related to construction, operation, credit, market, hydrology, connectivity, curtailment, regulation, and taxation. For these risks to be priced in, they need to be at least minimally identifiable.

Legal uncertainty does not necessarily prevent investment. However, it raises the required rate of return, increases the cost of financing, reduces the economic value of the asset, and can make marginally profitable projects unviable.

For investors and financial institutions, litigation becomes an integral part of the project evaluation process.

It is not enough to examine licenses, permits, contracts, and generation projections. It is necessary to identify pending administrative disputes; the risk of changes in regulatory framework; lawsuits that could affect revenues or charges; the stability of connection rights; precedents applicable to the business model; the possibility of replicating decisions for other assets; and dependence on regulatory interpretations that are not yet consolidated.

This reality changes the very nature of due diligence. Legal analysis ceases to be merely a document verification and begins to function as a risk modeling tool.

A court decision can alter a business's cash flow in a manner similar to a change in price or operating costs. It can recognize the right to connection, dismiss a charge, order rebilling, preserve a transitional rule, or prevent the retroactive application of a specific obligation.

Conversely, an unfavorable decision may require the return of funds, impose technical adjustments, validate unexpected charges, or compromise the continuity of a business model.

The Superior Court of Justice's ruling on the inclusion of the Distribution System Usage Tariff (TUSD) and the Transmission System Usage Tariff (TUST) in the ICMS tax base demonstrates the economic magnitude of jurisprudence in the sector.

The First Section consolidated its understanding in favor of including the tariffs and modulated the effects of the decision, ending a controversy that had lasted for years and involved consumers, companies and tax administrations [10].

Regardless of agreement with the adopted thesis, the case demonstrates that judicial interpretation can produce national financial impacts, alter liabilities, and modify the economic assumptions of contracts and investments.

Legal certainty, therefore, does not mean absolute immutability of the rules. The electricity sector needs to evolve. This means that changes must observe competence, transparency, proportionality, motivation, and protection of legitimately established situations.

6. The risk of individual decisions having systemic effects.

One of the main challenges of the judicialization of the electricity sector lies in the tension between individual protection and collective stability.

When an agent obtains a court order suspending a charge or obligation, the economic effect rarely disappears. In regulated systems, the cost may be redistributed among consumers, utilities, or other market participants.

The problem becomes even more serious when different courts or tribunals adopt contradictory interpretations of the same rule. Agents in similar economic conditions end up fulfilling different obligations, not due to regulatory differences, but because they do or do not have a favorable court decision. This fragmentation reduces competitive equality.

In the power generation market, for example, an injunction can temporarily suspend contractual obligations or charges related to the use of the system. While the plaintiff preserves its cash flow, agents who did not file a lawsuit continue to bear the costs. If the decision is subsequently overturned, the accumulated liabilities could threaten the very economic viability of the project.

A ANEEL He recognized this phenomenon when dealing with generators that did not start operating and resorted to the courts to avoid charges related to CUST (Transmission System Usage Contracts) [11]. The multiplication of these demands demonstrated that the problem was not only contractual, but structural, requiring a more comprehensive regulatory solution.

The case offers a relevant lesson: when dozens or hundreds of agents litigate the same issue, the origin of the conflict may lie in the inadequacy of the regulatory design, the occurrence of a systemic event, or the inability to provide a timely administrative solution.

In these cases, the most effective response will not be simply to judge each action in isolation. It will be necessary to promote institutional coordination between the judiciary, regulators, policymakers, and market agents.

7. The judiciary as a stabilizer, not a planner, of energy policy.

The expansion of judicialization does not authorize the Judiciary to assume the role of planner of the electrical system. The definition of the energy matrix, the contracting of capacity, the design of auctions, the expansion of networks, and the choice of remuneration mechanisms involve technical, political, and economic options attributed to the Executive Branch, the National Congress, and sectoral institutions.

The Judiciary lacks the institutional legitimacy and technical structure to permanently formulate energy policy.

Its leading role should be of a different nature: to control legality, protect rights, preserve legitimate expectations, and ensure consistency between law, regulation, and administrative application. This distinction is fundamental.

When the Judiciary determines which technology should be contracted, replaces a tariff methodology without systemic evaluation, or directly redefines cost allocation, it approaches regulatory formulation.

When checking if the ANEEL Whether the law was respected, whether the distributor followed the applicable procedure, whether there was adequate justification, or whether a rule was applied retroactively, legitimate judicial control is exercised.

For investors, this balance is particularly important. Excessive deference can leave the agent unprotected against arbitrary actions. Excessive intervention, in turn, can make regulation unstable and dependent on fragmented judicial decisions.

The most favorable environment for investment will be one in which the regulator possesses autonomy and technical capacity, but operates under effective legal control and with high-quality decision-making.

8. The main trends in litigation for the coming years

The evolution of the electricity grid allows us to identify areas where litigation tends to increase.

8.1 Connection, network capacity and flow reversal

The expansion of distributed generation and renewable energy projects increases competition for connectivity capacity. Technical constraints, the need for reinforcements, construction delays, reverse flow, and disagreements over responsibility for investments will be significant sources of litigation.

The electrical grid becomes not just physical infrastructure, but a scarce economic asset. Access to it can determine the viability of the entire project.

8.2 Curtailment and generation restrictions

The growth of variable energy sources increases the possibility of generation cuts or limitations for operational reasons. Controversies will arise regarding who should bear the risk, under what circumstances there will be compensation, how the energy not generated will be calculated, and which events constitute the producer's ordinary risk. The legal treatment of curtailment will be crucial for the financing of new wind and solar projects.

8.3 Energy Storage

Storage can simultaneously act as generation, consumption, ancillary service provider, and network support infrastructure. This functional multiplicity challenges traditional regulatory categories.

Law No. 15.269/2025 expanded the powers of ANEEL to regulate, supervise and establish rules for remuneration and access to storage systems connected to the National Interconnected System or to isolated systems [12].

The regulation of this market is likely to generate controversy regarding licensing, charges, double billing for network use, taxation, service contracting, and competition with regulated assets.

8.4 Micro and mini distributed generation

The interpretation of the transitional rules of Law No. 14.300/2022 will continue to be the subject of disputes. Issues such as temporal framework, acquired rights, tariff composition, credit compensation, changes in ownership, shared generation modalities, and limits imposed by distributors are likely to reach the courts.

Litigation will increase whenever administrative action reduces or modifies the economic expectations considered in the investment.

8.5 Market opening and new business models

The progressive opening of the free market will expand the number of consumers exposed to energy contracts, traders, aggregators, and service providers.

The greater the contractual freedom, the greater the need for clear clauses regarding price, guarantees, default, volatility, representation before the Chamber of Electric Energy Commercialization, and extraordinary regulatory events.

The expansion of the free market could shift some of the litigation currently concentrated in relationships between consumers and distributors towards contractual disputes between private agents.

8.6 Taxation of the new energy economy

The tax system was still built on the traditional logic of production, circulation, and consumption. Shared generation, storage, vehicle recharging, demand response, and simultaneous service provision create situations whose legal nature is not always evident.

Tax reform and its regulations will add a new layer of interpretation. The form of taxation may favor or hinder business models, making tax litigation a relevant dimension of the energy transition.

8.7 Climate and socio-environmental responsibility

The expansion of transmission lines, wind farms, solar power plants, and other infrastructure will generate land, environmental, and community conflicts.

The energy transition will not be legally legitimate simply because it uses renewable sources. Projects must comply with licensing requirements, consult with affected communities, protect biodiversity, and ensure the fair sharing of benefits.

Socio-environmental litigation may interfere with timelines, costs, and permits, requiring investors to incorporate environmental, social, and governance criteria from the initial phase of projects.

9. A new legal governance for investors

Given this scenario, investors and financiers will need to abandon the idea that regulatory risk is an external element, addressed only after the problem arises. Legal governance must be incorporated into the asset strategy.

This requires continuous monitoring of the regulatory agenda, participation in public consultations, mapping of precedents, analysis of administrative processes, review of contractual risk matrices, and creation of financial scenarios for regulatory changes.

It will also be necessary to assess the institutional quality of the counterparties. Energy transition projects often depend on long-term relationships with distributors, transmission companies, traders, consumers, integrators, property owners, and system operators. Contractual weaknesses in any of these relationships can compromise the entire economic model.

For the financial market, the main change will be understanding that litigation should not be analyzed solely based on the value assigned to the case. A given lawsuit may have a reduced procedural value and, at the same time, discuss a legal argument capable of impacting all of the company's future revenue.

Proper assessment should consider the probability of loss, the effect on cash flow, the possibility of replication to other assets, the duration of the process, and the reputational and regulatory impacts. From this perspective, legal intelligence becomes an instrument for preserving value.

10. Final considerations

Brazil's energy transition will be built on solar panels, wind turbines, batteries, smart grids, electric vehicles, and new contracting models. But it will also be built on laws, resolutions, contracts, administrative decisions, and judicial precedents.

The Judiciary will play a leading role because technological and economic transformations will occur at a speed exceeding the traditional capacity for regulatory adaptation. It will be up to the courts to resolve conflicts between innovation and regulation, between individual interest and systemic stability, between legitimate changes and the protection of trust. This leading role, however, should not turn the Judiciary into a substitute regulator.

The stability of the new electricity matrix will depend on building a balanced institutional relationship: the Legislative branch defines the legal framework; the Executive branch formulates energy policy; and ANEEL The government regulates and oversees with technical expertise; and the judiciary controls legality, protects rights, and prevents arbitrary actions.

For investors, the main conclusion is clear: legal risk is no longer peripheral. It is now an integral part of the economic core of energy transition projects.

Brazil's attractiveness will not depend solely on the abundance of renewable resources, the size of the consumer market, or the growing demand for clean energy. It will depend on its ability to offer regulatory predictability, consistent case law, and efficient conflict resolution mechanisms.

Brazil's new electricity grid will inevitably be more decentralized, digital, and renewable. The question that remains open is whether it will also be legally predictable. The answer will be largely determined by the Judiciary.

Notes and references

[1] ENERGY RESEARCH COMPANY — EPE. Ten-Year Energy Expansion Plan 2034. The PDE 2034 foresees maintaining the share of renewables above 85% in the electricity matrix and expanding solar, wind and distributed generation sources. Available on the EPE portal. Accessed on: August 2, 2026.

[2] ENERGY RESEARCH COMPANY — EPE. Study shows that the energy sector could receive investments of up to R$ 3,2 trillion by 2034. Available on the EPE website. Accessed on: August 2, 2026.

[3] NATIONAL ELECTRIC ENERGY AGENCY — ANEEL. The role of ANEEL in the process of energy transition. The Agency highlights the need to adapt the rules for storage, distributed energy resources, climate change and new consumption demands. Accessed on: August 2, 2026.

[4] BRAZIL. Law No. 14.300, of January 6, 2022. Establishes the legal framework for distributed microgeneration and minigeneration, the Electric Energy Compensation System and the Social Renewable Energy Program.

[5] NATIONAL ELECTRIC ENERGY AGENCY — ANEELEnergy Storage Systems. The Agency recognizes the importance of storage to compensate for the intermittency of renewable sources and to improve the quality and reliability of supply. Accessed on: August 2, 2026.

[6] BRAZIL. Law No. 9.427, of December 26, 1996. Establishes the National Electric Energy Agency and regulates the regime of concessions for public electric energy services.

[7] SUPERIOR COURT OF JUSTICE — STJ. President of the STJ suspends preliminary injunction that interfered with the calculation of prices in the electricity sector. Suspension of Preliminary Injunction and Judgment No. 3.258/DF. Published on April 18, 2023.

[8] SUPERIOR COURT OF JUSTICE — STJ. President of the STJ authorizes auction of ANEEL for more than five thousand kilometers of electric power transmission lines. Security Suspension No. 3.402/DF. Published on July 1, 2022.

[9] SUPERIOR COURT OF JUSTICE — STJ. Decision that altered the calculation of the is suspended. ANEEL For compensation to municipalities affected by the construction of reservoirs. Suspension of Preliminary Injunction and Judgment No. 2.988. Published on September 2, 2021.

[10] SUPERIOR COURT OF JUSTICE — STJ. TUSD and TUST are included in the calculation basis of ICMS on electricity, defines First Section. EREsp No. 1.163.020; REsp No. 1.692.023; REsp No. 1.699.851; REsp No. 1.734.902; and REsp No. 1.734.946. Judgment under the repetitive appeals procedure.

[11] NATIONAL ELECTRIC ENERGY AGENCY — ANEEL. ANEEL The agency grants amnesty to generators that have not yet entered operation and regularizes the situation of those who want to adjust the construction schedule. The agency noted that several generators have filed lawsuits to avoid charges under their transmission system usage contracts. Published on July 11, 2023.

[12] BRAZIL. Law No. 15.269, of November 24, 2025. Among other provisions, assigns to ANEEL competence to regulate, supervise and establish rules for remuneration and access to electrical energy storage systems.

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.