The LRCAP (Capacity Reserve Auction) could generate an additional cost of approximately R$ 40 billion per year for Brazilian consumers, with an estimated impact of approximately 10% on the average electricity tariff.
The assessment comes from ABRACE Energia (Brazilian Association of Large Industrial Energy Consumers and Free Consumers), which sees risks in the contracted volume and the low competition in the bidding process.
While acknowledging the importance of the auction in ensuring the security of the electrical system, the organization believes that the contracts awarded exceeded the country's current needs, which is likely to increase costs and put pressure on electricity bills.
For Abrace, the low competitiveness in the auction is one of the main warning signs. According to the association, the efficiency of this type of mechanism depends directly on the competition between bidders and the adequacy of the contracted volume to the system's demand.
"The larger the contracted volume, the greater the associated charge and, consequently, the higher the cost for Brazilian consumers. Therefore, it is essential that contracts are always aligned with the real needs of the system," the entity highlighted.
According to the association, LRCAP is a relevant instrument for meeting power needs, but it should not be treated as a sole solution to the challenges facing the electricity sector. The organization argues that decisions of this type should be made with greater planning and gradual implementation.
Furthermore, Abrace emphasizes the need for regulatory advancements to prevent further cost increases in the future, including strengthening economic signals, modernizing tariffs, and improving the cost-sharing model.
The association also points to the importance of expanding competition in upcoming auctions, with the inclusion of new solutions, such as energy storage systems and demand response mechanisms, which can contribute to more efficient decisions and lower costs for consumers.
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