MME moves forward with structuring the 2026 Capacity Reserve Auctions
Inside the 2026 LRCAP
On October 24, 2025, the Ministry of Mines and Energy (“MME”) published Normative Ordinances No. 118/2025 and No. 119/2025, which establish the guidelines and procedures for the 2026 Capacity Reserve Auctions in the form of Power (“2026 LRCAP”). The 2026 LRCAP will take place following the cancellation of the auction initially scheduled for 2025, whose guidelines under Normative Ordinance No. 96/2024 were revoked by Normative Ordinance No. 106/2025.
The MME decided to hold two auctions, scheduled for March 18 and 20, 2026. The first will be dedicated to power availability products from natural gas-fired thermal plants (TPPs), coal-fired thermal plants, and expansions of hydropower plants (HPPs), in accordance with Ordinance No. 118/2025. The second will cover power availability products from fuel oil-, diesel-, and biodiesel-fired thermal plants, as set forth in Ordinance No. 119/2025.
Two new products were created for 2031 for natural gas- and coal-fired thermal plants and hydropower expansions; however, only biodiesel-fired thermal plants were included among the biofuel TPPs with requirements related to availability, traceability, and quality, as well as compatible logistics and storage. Another innovation was the creation of separate products for natural gas-fired thermal plants depending on whether they are connected to the natural gas transportation system.
In both auctions, projects that won regulated auctions with effective CCEAR, CER, or CRCAP contracts during supply periods that overlap with the 2026 LRCAP will not be eligible to participate.
Our Energy team has prepared a guide with the main information about the auctions:
1st 2026 LRCAP: Natural Gas-Fired Thermal Power Plants (“NG ”) connected or not connected to the Natural Gas Transportation System (“STGN”); Coal-Fired Thermal Power Plants (“Coal”); and Hydropower Plant (HPP) Expansions:
| Product | Source(s) | Project nature | Start of supply | Supply period | Eligibility conditions |
|---|---|---|---|---|---|
| Thermal Power Capacity 2026 | NG Coal |
Existing | 08/01/2026 | 10 years | Firm connection/transport commitment for the NGTS and firm NG supply for a minimum of 7 years, plus an additional 5 years or until the end of the CRCAP. Signing of the CRCAP is conditioned on the submission of firm NGTS contracting to ANP. No operational inflexibility. Compliance with certain operational flexibility requirements. |
| Thermal Power Capacity 2027 | NG Coal |
Existing | 08/01/2027 | 10 years | |
| Thermal Power Capacity 2028 | NG Coal |
NG: new and existing (both competing for the same Product) Coal: existing |
10/01/2028 | New: 15 years Existing: 10 years |
Same as above, except for the mandatory firm connection/contracting of the NGTS (if the project is connected to the NGTS, the same requirements apply). |
| Thermal Power Capacity 2029 | NG Coal |
NG: new and existing (both competing for the same Product) Coal: existing |
08/01/2029 | New: 15 years Existing: 10 years |
|
| Thermal Power Capacity 2030 | NG Coal |
NG: new and existing (both competing for the same Product) Coal: existing |
08/01/2030 | New: 15 years Existing: 10 years |
|
| Hydropower Capacity 2030 | HPP | Expansion with installation of new generating units | 08/01/2030 | 15 years | Centrally dispatched plant. Plant not extended or auctioned under Law 12,783/2013, except under the quota system with part of firm energy outside the regime. |
| Thermal Power Capacity 2031 | NG Coal |
NG: new and existing (both competing for the same Product) Coal: existing |
08/01/2031 | New: 15 years Existing: 10 years |
Same as Thermal Power Capacity 2028–2030. |
| Hydropower Capacity 2031 | HPP | Expansion with installation of new generating units | 08/01/2031 | 15 years | Same as Hydropower Capacity 2030. |
Highlights:
- Thermal power projects will not be technically qualified if they have: (i) CVU = 0; (ii) a CVU higher than the highest CVU of natural gas-fired thermal plants in the PMO for the month of publication; (iii) annual inflexibility > 0; (iv) early dispatch; and (v) T-on ≤ 8h or T-off ≤ 8h (considering ramp rates and the ratio between minimum and maximum generation – Gmin/Gmax).
- Biomethane may be classified as natural gas (GN), provided ANP technical specifications are met.
- The CRCAPs must provide for the possibility of anticipating the start of commercial operation—and, consequently, the start of supply—subject to assessment and approval by the CMSE for the new supply start date, provided that: (i) the anticipation brings technical and/or financial benefits to the SIN, and (ii) all systemic requirements are met, including connection availability.
- It is prohibited to change technical characteristics that: (i) compromise the amount of capacity sold in the LRCAP; (ii) result in noncompliance with the operational inflexibility parameters declared at project registration; or (iii) modify the natural gas supply logistics in a way that alters the project’s classification within the LRCAP products.
2026 1st LRCAP Timeline
- Until 11/14/2025 (12:00 p.m.): Registration and submission of documents to EPE (AEGE).
- Until 11/14/2025 (12:00 p.m.): Submission to ANP of gas supply feasibility data (applicable to NG thermal plants).
- Until 12/12/2025 (12:00 p.m.): Submission via AEGE of the parameters and prices that compose the CVU, as well as flexibility parameters.
- Until 12/12/2025 (12:00 p.m.): Submission to EPE of ANP’s opinion on natural gas supply (when applicable).
- Until 01/16/2026: Publication by ONS of the Technical Note on Remaining Capacity of the SIN for Outflow.
- 03/18/2026: Auction date (2026 LRCAP — Gas/Coal/HPP Expansions).
- Start of supply: August 1 of each year, except for the 2028 product (October 1, 2028).
2nd 2026 LRCAP: Fuel Oil, Diesel Oil, and Biodiesel
| Product | Source(s) | Project nature | Start of supply | Supply period | Eligibility notes |
|---|---|---|---|---|---|
| Thermal Power Capacity 2026 | Fuel oil and diesel | Existing | 08/01/2026 | 3 years | Projects that have already obtained authorization at any point and achieved commercial operation released by ANEEL (even if currently suspended). No operational inflexibility. |
| Thermal Power Capacity 2027 | Fuel oil and diesel | Existing | 08/01/2027 | 3 years | Same as above. |
| Thermal Power Capacity 2030 (Biodiesel) | Biodiesel | Existing | 08/01/2030 | 10 years | Developer must prove fuel availability, traceability, and quality. Mixing biodiesel with fossil fuels is prohibited. Adequate logistics/storage required. Developer must also demonstrate minimum supply for 7 years, plus the remaining contract term, through contracts/commitment letters with suppliers authorized by ANP. |
- Thermal power projects will not be technically qualified:
i. if they have (i) CVU = 0; (ii) annual inflexibility > 0; or (iii) early dispatch;
ii. if they do not meet the minimum operational flexibility limits (T-on ≤ 7h; T-off ≤ 4h; considering ramp rates and the ratio between minimum and maximum generation – Gmin/Gmax); or
iii. if they are biodiesel-fired plants with a fossil fuel blend.
Timeline — 2026 LRCAP (Fuel Oil/Diesel/Biodiesel) — Ordinance No. 119/2025
- Until 11/14/2025 (12:00 p.m.): Registration and submission of documents to EPE (AEGE).
- Until 12/12/2025 (12:00 p.m.): Submission via AEGE of the parameters and prices that compose the CVU and the flexibility parameters.
- Until 01/16/2026: Publication by ONS of the Technical Note on Remaining Capacity of the SIN for Outflow.
- 03/20/2026: Auction date (2026 LRCAP — Fuel Oil/Diesel/Biodiesel).
- Start of supply: August 1, 2026 (Product 2026); August 1, 2027 (Product 2027); and August 1, 2030 (Product Biodiesel 2030).
