Published on January 2 of this year in the Federal Official Journal, Normative Ordinance GM/MME 96/24, of the Ministry of Mines and Energy (amended by Normative Ordinance MME 97/25), established the guidelines for holding the auction for contracting electric power from new and existing generation projects.

The auction, called Reserve Capacity Auction in the form of Power 2025 (LRCAP 2025), aims to ensure the continuity of the supply of electricity and meet the need for power required by the National Interconnected System (Sistema Interligado Nacional – SIN), through the contracting of centralized dispatch generation sources.

The 2025 LRCAP seeks to strengthen the energy transition process by proposing a contract that is more aligned with the system's requirements. This aims to ensure the security of energy supply in view of the profound transformations that the Brazilian electricity system has been facing recently, especially with the expansion of renewable sources in the country.

An important innovation presented in the 2025 LRCAP was the possibility of contracting reserve power capacity also through the expansion of hydroelectric plants, in addition to thermoelectric plants.

Date for the 2025 LRCAP and products

According to Normative Ordinance GM/MME 96/24, the 2025 LRCAP will be held on June 27, 2025. At the event, the following products will be negotiated:

  • 2025 Thermoelectric Power Product: intended for existing natural gas and biofuel thermoelectric plants, with delivery on September 1st, 2025, with a 10-year contract.
  • 2026 Thermoelectric Power Product: intended for existing natural gas and biofuel thermoelectric plants, with delivery on July 1st, 2026, with a 10-year contract.
  • 2027 Thermoelectric Power Product: intended for existing natural gas and biofuel thermoelectric plants, with delivery on July 1st, 2027, with a 10-year contract.
  • 2028-A Thermoelectric Power Product: intended for existing natural gas and biofuel thermoelectric plants, with delivery on July 1st, 2028, with a 10-year contract.
  • 2028-BThermoelectric Power Product: intended for new natural gas and biofuel thermoelectric plants, with delivery on July 1st, 2028, with a 15-year contract.
  • 2029-A Thermoelectric Power Product: intended for existing natural gas and biofuel thermoelectric plants, with delivery on July 1st, 2029, with a 10-year contract.
  • 2028-B Thermoelectric Power Product: intended for new natural gas and biofuel thermoelectric plants, with delivery on July 1st, 2029, with a 10-year contract.
  • 2030-A Thermoelectric Power Product: intended for existing natural gas and biofuel thermoelectric plants, with delivery on July 1st, 2030, with a 10-year contract.
  • 2030-B Thermoelectric Power Product: intended for new natural gas and biofuel thermoelectric plants, with delivery on July 1st, 2030, with a 15-year contract.
  • 2030 Hydroelectric Power Product: intended for projects to expand installed capacity, through the installation of new generating units, of existing hydroelectric plants of centralized dispatch, with delivery for July 1st, 2030, with a 15-year contract.

    • Note: if the hydroelectric plant has been extended or tendered in accordance with Law 12,783/13, the project will not be eligible to participate in the 2025 LRCAP, unless the plant has been tendered under the quota regime and has part of the physical guarantee outside this regime, as provided for in article 2-A of Law 9,478/97.

All projects contracted in the 2025 LRCAP must have operational flexibility characteristics, in order to meet all the dispatches defined in the daily schedule established by the National System Operator (Operador Nacional do Sistema – ONS).

According to the ordinance, it will be possible to request the anticipation of the start of commercial operation date, with the consequent anticipation of the start of supply of the plant to Aneel. The request must be submitted to the Electric Sector Monitoring Committee (CMSE) for evaluation and approval, in order to establish a new supply start date. To this purpose, the following conditions must be met:

  • existence of technical and/or financial benefits for the SIN of the requested anticipation; and
  • compliance with the systemic requirements for the entry into commercial operation, including the availability of connection on the new supply date.

Remuneration

Sellers will be entitled to the remuneration resulting from the 2025 LRCAP after the start of supply, and after the start of commercial operation of the plant.

  • Remuneration for the availability of contracted power: the owner of the generation plant will be entitled to a fixed annual revenue, to be paid in 12 monthly installments, which may be reduced according to the calculation in previous months.

The calculation of fixed revenue will be the responsibility of the seller and must cover, among other factors:

  • investment cost and remuneration (internal rate of return);
  • connection costs to the transmission and distribution system;
  • cost of use of the transmission or distribution system;
  • fixed operating and maintenance (O&M) costs;
  • insurance costs and guarantees of the project and the seller’s financial commitments;
  • direct and indirect taxes and charges;
  • costs arising from the obligation of availability for dispatch at the discretion of the ONS, including fuel storage costs; and
  • costs arising from the obligation to maintain the availability of the contracted power throughout the contract, including any investments.

Projects unable to participate in the 2025 LRCAP

According to the ordinance, the following projects are not technically qualified by the Energy Research Office (Empresa de Pesquisa Energética – EPE):

  • new and existing thermoelectric projects that use coal, diesel oil or fuel oil as fuel;
  • thermoelectric projects with a variable unit cost (Custo Variável Unitário – CVU) equal to zero;
  • thermoelectric projects whose CVU is higher than the highest CVU in the monthly operation program (Programa Mensal de Operação – PMO) of January 2025, excluding the CVU of thermoelectric plants with availability equal to zero;
  • thermoelectric projects whose value of the annual generation inflexibility is greater than zero;
  • thermoelectric projects with early dispatch;
  • new and existing thermoelectric generation projects that declare operational flexibility parameters that do not comply with the concepts defined in the network procedures;
  • the existing portion or expansion of plants that were extended or tendered in accordance with Law 12,783/13, except for those tendered under the quota regime and which have part of the physical guarantee outside this regime (article 2-A, of Law 9,478/97);
  • portion of hydroelectric generation projects without expansion;
  • expansion of hydroelectric generation projects that do not add additional dispatchable power capacity to the SIN, limited to the monthly contribution amounts defined by the EPE’s methodology;
  • expansion of hydroelectric generation projects without the installation of new generating unit(s);
  • projects that have won regulated auctions, even if they have not yet been awarded, or that have contracts for the commercialization of electric power in the regulated market (Contratos de Comercialização de Energia Elétrica no Ambiente Regulado – CCEARs), reserve energy contracts (Contratos de Energia Reserva – CERs) or reserve capacity power contracts (Contratos de Potência de Reserva de Capacidade – CRCAPs) registered with the Chamber of Commercialization of Electric Energy(Câmara de Comercialização de Energia Elétrica – CCEE), in force during a supply period that coincides, even partially, with those foreseen for the 2025 LRCAP;

    • Note: the provision does not apply in cases of expansion of hydroelectric projects participating in the 2030 Hydroelectric Power product, provided that the expansion has not won regulated auctions, even if not yet awarded, and that it does not have CCEARs, CERs or CRCAPs registered with the CCEE.
  • generation projects whose candidate has a remaining capacity for the flow of generation lower than the respective injected power;
  • projects powered by biofuels that have a mixture with fossil fuel in their composition; and
  • projects that do not meet the conditions for registration and technical qualification established by Normative Ordinance 102/GM/MME of 2016, observing the other conditions set forth in Normative Ordinance GM/MME 96/24.

Minimum flexibility requirements for thermoeletric plants

The minimum flexibility requirements for thermoelectric plants mentioned in  Normative Ordinance GM/MME 96/24 are:

New thermoelectric plants Existing thermoelectric plants
➔ Minimum time of permanence in the on condition (T-on), less than or equal to 8 hours – includes the time required for the start-up and shut-down of the generating units. ➔ Minimum time of permanence in the T-on condition, less than or equal to 12 hours – includes the time required for the start-up and shut-down of the generating units.
➔ Minimum time of permanence in the off condition (T-off), less than or equal to 8 hours. ➔ Minimum time of permanence in the T-off condition, less than or equal to 4 hours.
➔ Total time considering the drive ramp (timing time and transition between null generation and Gmin) and the load take-off ramp (transition between Gmin and Gmax), less than or equal to 2 hours. ➔ Total time considering the drive ramp (timing time and transition between null generation and Gmin) and the load take-off ramp (transition between Gmin and Gmax), less than or equal to 7 hours.
➔ Total time considering the shut-down ramp (transition between Gmin and null generation) and the load relief ramp (transition between Gmax and Gmin), less than or equal to 1 hour. ➔ Total time considering the shut-down ramp (transition between Gmin and null generation) and the load relief ramp (transition between Gmax and Gmin), less than or equal to 1 hour.
➔ Ratio between the minimum generation and the maximum generation of each generating unit (Gmin/Gmax), less than or equal to 80%. ➔ Ratio between Gmin and Gmax of each generating unit, less than or equal to 80%.

Qualification and registration

In order to take part in the 2025 LRCAP, developers will have to request the registration and technical qualification of their projects to EPE, submitting the necessary documentation by 12 noon on February 14, 2025. The deadline for submission begins on January 13.

Final considerations

Aneel was responsible for preparing the notice and the respective CRCAPs, in addition to adopting the necessary measures for the promotion of the 2025 LRCAP. It is also expected that the Ministry of Mines and Energy will publish a specific normative ordinance, containing the procedures for carrying out the 2025 LRCAP.

The Ministry of Mines and Energy will define the total amount of reserve capacity to be contracted, based on the studies of the EPE and the ONS, respecting the general criteria for supply guarantee established by the National Energy Policy Council.

Although the rules were changed one day after the publication of the original text – basically to include biofuel thermoelectric plants – no new changes are expected in the text.

Only the publication of the ONS rules with the assumptions and criteria for calculating the flow margin – fundamental information for the investors' decision-making process – and the publication of the Ministry of Mines and Energy’s normative ordinance with the procedure for carrying out the 2025 LRCAP, as mentioned above, are still pending.