The MME (Ministry of Mines and Energy) published this Friday (4), in the Official Gazette of the Union, Ordinance No. 106, which revokes Ordinances No. 96/24, No. 97/25, No. 100/25 and No. 103/25. With this, the government officially suspends the 2nd Auction of Capacity Reserve in the Form of Power (LRCAP 2025), scheduled for June 27.
The revoked ordinances dealt with the guidelines for the auction, which had already been the subject of intense legal controversy. The expectation now is that the government will open a new public consultation to discuss sensitive points of the auction, such as Factor A — used to calculate the price of energy —, among other issues raised by industry players.
The dispute had already been judicially paralyzed since last Tuesday (1st), when the 17th Federal Court of the Judicial Section of the Federal District granted an injunction to the consumer protection association Proteste. In the decision, Judge Diego Câmara suspended the effects of Ordinance No. 100/25 and ordered the opening of a public consultation to debate, with society and the electricity sector, the auction system.
The Minister of Mines and Energy himself, Alexandre Silveira, had already demonstrated concern about the judicialization of the process and its potential impacts.
Furthermore, ABRACE — an association that represents large industrial energy consumers — had asked the MME executive secretary, Artur Valério, to postpone the auction. “Moving forward under these conditions represents a significant risk, and could result in unnecessary billion-dollar costs that will be passed on to energy consumers,” the entity warned.
Last Friday (29/3), the minister of the STJ (Superior Court of Justice), Gurgel de Faria, granted a preliminary injunction in favor of Eneva, suspending the application of Factor A as a flexibility criterion in the auction.
The factor considers a plant's ability to turn on and off quickly, combined with its CVU (Variable Unit Cost). The greater the flexibility and the lower the CVU, the more competitive the plant is. Eneva operates combined cycle thermoelectric plants, which are recognized for these characteristics.
In response to another court decisionl, the MME was forced to change the auction guidelines to allow the participation of thermoelectric plants with CVU above R$ 1.711/MWh. With the publication of Ordinance No. 103/2025, the ceiling was readjusted to approximately R$ 2.600/MWh, resuming the criteria of Ordinance No. 96/2024, of December 31.
ABSAE (Brazilian Energy Storage Association) criticized the recent changes. For the entity, the increase in the CVU ceiling, the elimination of Factor A and, finally, the suspension of the auction could generate significant impacts for the consumer and the SEB (Brazilian Electric System). Among the risks highlighted are: increased tariffs, recarbonization of the matrix, operational inefficiencies and supply risks as early as 2026.
“The latest decisions raise concerns about the dismantling of the capacity contracting model and jeopardize the climate commitments assumed by Brazil in the Paris Agreement, by significantly increasing greenhouse gas emissions — which goes against the decarbonization goals of the electricity sector, precisely in the year in which the country will host COP30 and will be in the spotlight of the international climate agenda,” said the ABSAE.
The capacity auction aims to contract power to provide flexibility to the operation of the electrical system. The event will feature ten products, six of which are for existing thermal power plants, three for new thermal power plants and one for hydroelectric plants, with a supply period between 2025 and 2030.
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