en.Wedoany.com Reported - Brazil's Ministry of Mines and Energy (MME) defended the nearly 20 GW of power contracts signed in the Capacity Reserve Auction (LRCAP) held in March this year, most of which came from thermal power projects, during a hearing at the Chamber of Deputies' Mines and Energy Committee on Tuesday (2nd). The auction has been questioned by lawmakers and representatives of the renewable energy industry.
Acting Minister of Mines and Energy, Gustavo Ataíde, responded to criticism by stating that it is necessary to "move beyond this false opposition between thermal power plants and renewable energy." He explained that thermal power plants contracted on an availability basis will only be dispatched when renewable energy generation is insufficient to meet demand, a mechanism that allows Brazil to expand the share of solar and wind power in the electricity system. Ataíde also noted that the growth in energy consumption, climate change, the accelerated pace of economic electrification, and the increasing share of variable renewable energy require the contracting of dispatchable resources to ensure the reliability of the National Interconnected System.
The acting minister emphasized that the main challenge for the electricity sector today is ensuring available power during peak hours. The rapid expansion of renewable energy, particularly solar power, has introduced new operational challenges to the system. He stated that the LRCAP auction contracts security, not energy itself. Studies by the Energy Research Company (EPE) and the National Electric System Operator (ONS) indicate that without new contracts, the risk of power shortfalls will increase in the coming years. The first LRCAP auction this year contracted nearly 19 GW.
During the hearing, ONS Operations Planning Director, Alexandre Zucarato, stated that supply security studies show a deterioration in system security indicators between 2027 and 2030. Even after the LRCAP contracts, supply standards have not been fully met. EPE President, Thiago Prado, emphasized that this auction should not be viewed as a traditional energy auction, noting that "the LRCAP is not an energy auction, but an auction for the security and capacity of the power system." The hearing took place against a backdrop of criticism from lawmakers and industry participants regarding the auction design, involving questions about the participation of battery energy storage systems, adjustments to the auction's maximum price cap, and controversies over the dominance of thermal power projects.
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