Manifesto led by Abraget rebuts criticism of the capacity reserve auction, target of actions in Justice, Cade and TCU
A (Brazilian Association of Thermoelectric Generators) and experts from the electrical sector released this Tuesday (May 19, 2026) a manifesto in defense of the contracting of thermoelectric plants in the (Capacity Reserve Auction in the form of Power). The group states that the mechanism is necessary to avoid blackouts and rationing and estimates that, without the event, Brazil could face costs of up to R$970 billion over the next 15 years. Read (PDF – 282 kB).
The document was signed by names linked to the electrical sector and the energy area, including the former minister of Mines and Energy Bento Albuquerquethe economist, the former director general of Luiz Carlos Ciocchithe former president of Reive Barros and representatives of Brazilian Association of Thermoelectric Generators.
The demonstration was announced amid increased pressure on the auction by the federal government. The LRCap is at Cade (Administrative Council for Economic Defense), at the TCU (Federal Audit Court), at the MPF (Federal Public Ministry) and at the Federal Court.
Fiesp (Federation of Industries of the State of São Paulo) to suspend the signing of the contest contracts, scheduled for May 21st and 22nd. The entity points out possible irregularities in the auction modeling and questions the increase in the plants’ ceiling prices just days before the dispute.
Faced with increasing judicial and regulatory pressure on the auction, the director of (National Electric Energy Agency), , stated this Tuesday (May 19) that an extraordinary meeting should be called to analyze the adjudication of the case so that the Court does not decide to suspend the contest until Wednesday (May 20, 2026).
The approval of the results by Aneel was scheduled for the collegiate meeting this Tuesday, but was postponed by Mosna, who stated that he was waiting for a judicial statement in the Abraenergias action before submitting the process for deliberation by the directors.
According to the competition notice, the winners of products that must be delivered this year must have the results approved by Thursday (May 21, 2026).
DEFENSE OF THERMAL POWER PLANTS
The manifesto maintains that the auction is an energy security mechanism for the SIN (National Interconnected System) and follows technical criteria established by the CNPE (National Energy Policy Council). According to the document, the “probability of load loss” of the system must remain below 5%.
Experts say that the event was not designed just to meet peak consumption times, but to ensure stability “24 hours a day, 7 days a week”.
“This is not a high-end auction, but an auction that guarantees 24/7 reliability,” says the text.
The document cites the blackouts recorded in Brazil in 2023 and in the Iberian Peninsula in 2025 as examples of system vulnerability outside traditional peak demand times.
The signatories also argue that power contracting was expanded because around 14 GW of thermal plants will have contracts terminated in the coming years, in addition to having accumulated demand since 2022, as the last auction of this type had been held in 2021.
BATTERY CRITIQUES
The manifesto also rebuts criticism from groups linked to renewable energy and questions the possibility of replacing thermoelectric plants with battery storage systems.
According to the text, batteries will have space in the Brazilian electrical matrix, but they still do not have sufficient operational reliability to replace thermal and hydroelectric plants in the system’s safety function.
Experts state that there is no consolidated experience in Brazil with batteries that use GFM (Grid Forming Control) technology and that there are still doubts about performance, useful life and interaction of the systems with the national electricity grid.
“We have no knowledge of how they will perform in the Brazilian system”, affirms or manifests.
The text also questions the ability of batteries to guarantee continuous energy supply over long periods, since, according to experts, most systems currently available have an average autonomy of around 4 hours.
DISPUTE OVER COSTS
One of the main points of contention surrounding LRCap involves the cost of the auction for consumers.
Fiesp and entities critical of the event claim that the ceiling prices for thermal plants doubled 72 hours before the contest. According to estimates used by the entities, the winning companies will have revenue of R$515.7 billion in 15 years, while the total cost to consumers could exceed R$800 billion when the plants are effectively activated.
Existing gas and coal thermal plants benefited most from the readjustments. The ceiling price for these plants rose by around 100%, according to questions presented to the courts and control bodies.
The manifesto released this Tuesday refutes these arguments and maintains that the analysis ignores the costs avoided with blackouts and rationing.
“Putting only the cost without pricing the benefits is a serious error in evaluation”, says the text.
According to the signatories, without the auction, Brazil could face losses of R$210 billion from blackouts and another R$760 billion from rationing over the next 15 years, totaling R$970 billion.
The document also states that battery systems “they would not prevent blackouts, much less rationing”, under the argument that storage devices do not generate energy.
JUDICIAL PRESSURE AND GOVERNMENT DEFENSE
LRCap also became the target of investigations and questions from different bodies.
Cade opened an administrative inquiry to investigate allegations made by the deputy (PP-CE) about possible technical inconsistencies and harm to consumers. The MPF asked the Court to immediately suspend the approval and signing of the auction contracts.
Currently, the (National Electric Energy Agency) keeps the approval of the event suspended and awaits a final court decision.
The Ministry of Mines and Energy denies irregularities and states that the process met all technical and legal criteria. The ministry says that the auction was monitored by the TCU and maintains that the cancellation of the event could create risks to energy security and harm to consumers.
The ministry also states that battery storage technologies will be discussed in a specific auction scheduled for 2026.
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