The Arayara Institute for Education for Sustainability has filed a lawsuit to suspend the participation of coal-fired power plants in the Reserve Capacity Auction (LRCAP) scheduled for 2026.
The lawsuit, filed on Tuesday (March 4th) in the 13th Federal Civil Court of the Federal District, targets the Union, the MME (Ministry of Mines and Energy), the EPE (Energy Research Company) and the ANEEL (National Electric Energy Agency).
According to the institute's assessment, the capacity auction represents yet another attempt by the Ministry of Mines and Energy to "reconcile sectoral interests" under the guise of energy system security.
The entity acknowledges the need to contract dispatchable power plants with rapid generation ramp-ups, capable of meeting peak demand and supporting the operation of the electrical system. However, it maintains that coal-fired power plants do not meet the operational flexibility requirements demanded by the ONS (National System Operator).
According to the lawsuit, technical studies indicate that coal-fired power plants have a slow rate of increase or decrease in generation. This would disqualify them as a fast-response resource, an attribute considered essential to ensure the reliability of the system in a context of greater participation of intermittent sources, such as solar and wind.
The institute states that a coal-fired power plant can take up to eight hours to reach full load and, once activated, needs to remain in operation for about 18 hours. In practice, this would require the ONS (National System Operator) to keep the plant dispatched for more than a day each time it is activated.
According to the organization, this operational rigidity tends to exacerbate the problem of renewable generation cuts – the so-called curtailment – by reducing the space for accommodating clean sources in the energy mix.
In addition to technical limitations, Arayara argues that coal increases greenhouse gas emissions and undermines the progress of the energy transition, running counter to the climate commitments made by Brazil.
For the March 20th LRCAP auction, three coal-fired thermoelectric projects were registered, totaling 1.440 MW. This volume corresponds to 1,61% of the total power registered in the auction. According to the institute's assessment, this is a relatively small share from the point of view of energy security, but with a high socio-environmental impact.
The inclusion of coal in the bidding process had already been questioned during the public consultation phase of the auctions, with negative repercussions in national media outlets. Even so, the source was maintained in the auction guidelines.
Legal risks
Another central point of the action involves the risk of future litigation. According to the institute, in order to become competitive in the bidding process, coal-fired power plants would tend to offer lower prices, compensating for their lower operational efficiency.
If they win the auction and are subsequently shipped in excess of what was expected or have their operating conditions altered, they could go to court alleging economic and financial imbalance and claiming additional revenue.
In the organization's view, the inclusion of coal-fired power plants brings legal, economic, competitive, environmental, and climate risks to the electricity sector.
The lawsuit further argues that there is a flaw in the justification and a misuse of power in the administrative act that allowed coal to participate in the LRCAP.
"Now, if the motivation for the auction is to contract reserve capacity, that is, the capacity to generate energy for peak hours, it completely violates the purpose of the bidding process to include thermal power plants that would operate all the time when activated," the institute states in the proceedings.
The Arayara Institute reveals itself to be an organization opposed to fossil fuels, as evidenced by the participation of its representatives in news reports on the subject.
In the report “How the coal lobby is hindering the energy transition in Brazil.In an interview with IstoÉ magazine, the institute's Energy Transition Manager, John Wurdirg, called the president of ABSC (Brazilian Association for Sustainable Carbon), Fernando Luiz Zancan, a "great strategist and lobbyist" for the coal sector.
In the report “Brazil still subsidizes coal-fired electricity while seeking climate leadership at COP30.The institute's executive director, Nicole Figueiredo de Oliveira, said that committing to banning the use of coal would be a way for the Brazilian government to deliver "some progress" toward a just energy transition.
The Arayara Institute has over 30 years of experience defending socio-environmental rights related to energy, fossil fuels, and climate change. The organization is part of several other organizations, such as FONTE (National Forum for Energy Transition) and CONAMA (National Council for the Environment). Environment).
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