Brazilian government awards 19 GW capacity reserve contracts in thermal and hydroelectric power auction

Type: Development · Technology: Gas · Country: Brazil · Announced: 2026-03-18

The Brazilian government contracted 19 GW of capacity reserve through the 2026 LRCAP auction held at the CCEE headquarters in São Paulo on March 18, 2026. The auction awarded contracts for 60 new thermal plants totaling 8.86 GW, 35 existing thermal plants totaling 7.61 GW, and 5 hydroelectric expansions contributing 2.5 GW to the national grid. Natural gas plants dominated the awards with 15 GW capacity, while coal secured 1.4 GW and biomethane only 10 MW. The contracts span 10-15 years with supply beginning between 2026 and 2031, generating R$515.7 billion in fixed revenue for projects requiring R$64.5 billion in investments. The auction achieved a 5.52% discount to the ceiling price at an average cost of R$2.33 million per MW per year, aimed at addressing system flexibility needs amid growing intermittent renewable generation.

Analysis

The Brazilian government awarded 19 GW of capacity reserve contracts to various developers through the 2026 LRCAP auction held at the CCEE headquarters in São Paulo on March 18, 2026. The Ministério de Minas e Energia do Brasil and Câmara de Comercialização de Energia Elétrica (CCEE) were involved in the auction, which saw natural gas plants dominate the awards with 15 GW capacity. The contracts span 10-15 years with supply beginning between 2026 and 2031, generating R$515.7 billion in fixed revenue for projects requiring R$64.5 billion in investments. The auction achieved a 5.52% discount to the ceiling price at an average cost of R$2.33 million per MW per year. The auction awarded contracts for 60 new thermal plants totaling 8.86 GW, 35 existing thermal plants totaling 7.61 GW, and 5 hydroelectric expansions contributing 2.5 GW to the national grid.

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