The electricity sector faces a worrying scenario of contrasts at the beginning of February. On the one hand, captive consumers received the green flag signal last Friday (30), from the National Electric Energy Agency (ANEEL), indicating no additional costs on the invoice for the current month.
On the other hand, trading desks at energy companies faced a vertiginous escalation in energy prices between February 3rd and 4th, with the Settlement Price of Differences (PLD) reaching the regulatory ceiling of R$ 1.557/MWh.
In short, this situation, according to sources, tends to create a disconnect between regulatory perception and the operational reality of the National Interconnected System (SIN).
The result is a scenario of pressure on traders and independent consumers who were exposed to or projecting lower prices for February.
As a result, the issue ceases to be merely an episode of volatility and begins to be interpreted by some in the market as a broader warning about governance, predictability, and liquidity risks in the free contracting environment.
PLD on the rise
The PLD presented a relatively stable pattern during the early morning and morning of Tuesday (3), close to R$ 540/MWh, followed by an inflection at the end of the afternoon, according to data from the Chamber of Electric Energy Commercialization (CCEE).
Starting at 18 PM, prices began to rise in the Southeast/Central-West and South regions, reaching the regulatory ceiling between 20 PM and 21 PM, with values exceeding R$ 1.500/MWh. The Northeast and North regions also registered a similar trend.
The variation occurred almost simultaneously across submarkets. At the same time, the Marginal Operating Cost (CMO), an indicator directly linked to the formation of the PLD (Price of Energy in the Spot Market), reached a peak of up to R$ 4.800/MWh, according to information from the National Electric System Operator (ONS).
The ONS justified the cost increase by pointing to load growth due to high temperatures and reduced wind power generation. Furthermore, it was argued that deteriorating hydrological expectations and more conservative operation, with reservoir preservation, have been influencing the behavior of pricing models, such as Decomp, increasing the perception of scarcity in the very short term.
Paradox
On one side, there is the green flag, defined by ANEEL Based on parametric triggers and technical criteria specific to the flag system. On the other hand, an operational reality marked by more expensive thermal dispatch and increasing costs in the short term, immediately reflected in the PLD (Price of Energy in the Spot Market).
A significant portion of the bill, however, does not disappear; it merely changes location. The cost of dispatching thermal power plants out of merit order, adopted as a prudential measure by the ONS (National System Operator) to preserve reservoirs, tends to be allocated to System Service Charges (ESS), with a future impact on tariffs and adjustments.
The result could be a cumulative effect that, in some way, puts pressure on distributors and consumers further down the line, even though February officially remains "green" (meaning "green" or "green").
When consulted, the Brazilian Association of Electricity Distributors (Abradee) confirmed that the accumulated values are indeed "carried over" throughout the period until the annual tariff adjustment of each concessionaire. However, the entity does not see the need to claim from... ANEEL Extraordinary adjustments to tariffs.
Volatility
Eduardo Rossetti, Executive Director of Sales, Products, External Communication and Marketing at the Brazilian Energy Trading Platform (BBCE), points out that of the months of last year, energy delivered in January was the asset with the lowest value, fluctuating between R$ 59,00 and R$ 72,00 on January 28, 2025. "However, the price reality changed throughout the year, with prices reaching very high levels," he emphasizes.
According to the executive, one example is that in March 2025, the period with the highest recorded price changes throughout the trading sessions – between R$ 73,50 and R$ 335 per MWh – there was a variation of 356%.
Trading ended the year with a volatile December, driving volume above the historical average for the period, reports Rossetti.
At the close of the last month of 2025, prices for conventional energy delivery in the Southeast region for the months of January and December 2026 and the first quarter of 2026 (1Q26) closed with a decrease, it notes.
“Among the highlights was the contract expiring in January, which fluctuated between R$ 300,25 on November 28th and R$ 224,54 on the last business day of December, a drop of 25,22%. Volatility continued in January 2026, which closed with trading volumes also above the historical average,” reports the director of BBCE.
Predictability in check
José Antonio Sorge, a partner at Ágora Energia, expresses great concern about the lack of transparency and the "erratic" nature of the pricing models.
According to him, since January 2025, the application of new risk parameters in the Newave and Decomp models has removed the predictability of the agents, generating results that "no longer make clear" technical sense.
Sorge finds it strange that, although the Southeast region—the sector's "water tower"—has reservoirs with satisfactory inflows, prices in February have reached levels of R$ 400 to R$ 600, with hourly peaks outside of market logic.
He criticizes the generic explanation of ONS Regarding the temperature increase in the South and the drop in wind power generation, they argue that the impact of the load in the South is not significant enough to justify peak prices of R$ 4.000 across the entire system.
According to the executive, the communication process lacks transparency, and society is paying a very high price without a clear explanation of the energy savings achieved.
Failures
Edvaldo Santana, former director of ANEEL The CEO of NEAL (Negócios de Energia Associados) attributes the price increase to the hydrological scenario and the growing need to preserve reservoirs.
He points out that the country is facing a trend of reduced water availability and a more prolonged dry period, a scenario that should make the operation of the system progressively more expensive and risky.
Santana believes that if the hydrological outlook worsens, the system could quickly escalate to more stringent alert levels. He even suggests that, depending on how the situation evolves, the system could jump directly to a red alert level, bypassing intermediate stages, should the deterioration of the scenarios materialize.
In their analysis, the country's structural dependence on hydroelectric power remains high, and even the expansion of wind and solar power would not be enough to compensate for the effect of lower-than-expected rainfall.
For him, this reinforces the perception that the sector is experiencing a new cycle of structural pressure, which tends to repeat itself more frequently due to climate change.
A difficult year.
José Wanderley Marangon, CEO of the consulting firm MC&E, also expresses concern about the evolving water situation and the increasing unpredictability of weather forecasts.
He points out that previous forecasts indicated a favorable summer, but the rains have not materialized as expected so far, increasing the uncertainty.
According to Marangon, the flags should directly reflect reservoir storage levels and the marginal operating costs projected by industry models.
"If the system emerges from the summer with low levels, as is currently projected, the natural consequence tends to be a high PLD (Price of Energy in the Spot Market) and, by extension, more expensive tariffs," he points out.
The consultant states that, in this context, the outlook is for a complicated year, with a high probability of red flags throughout 2026.
He also points out that the Southeast region, where the country's main reservoirs are concentrated, is crucial for energy security. Rain in the South, for example, would have a limited effect, as the region does not have large reservoirs capable of sustaining significant storage.
Impacts on the market
The environment of price instability and regulatory unpredictability has direct repercussions on the financial equilibrium of the free market.
Recent financial crises between trading companies and power generation companies have raised the level of alert, given the risk of a cascading effect, in which the default of one agent can generate successive imbalances in contracts and companies in the sector.
The mood among market participants is one of apprehension, exacerbated by regulatory issues, rule changes, and increased price volatility.
The situation worsens even further when renewable energy generators fail to deliver contracted energy due to generation cuts ordered by the ONS (National System Operator), forcing energy traders to repurchase energy during peak price periods.
all the content of Canal Solar is protected by copyright law, and partial or total reproduction of this site in any medium is expressly prohibited. If you are interested in collaborating or reusing part of our material, please contact us by email: redacao@canalsolar.com.br.
