Brazil Contracts 19 GW in Record Power-Capacity Auction, Mostly Gas-Fired Plants

Overview

• Authorities awarded 18.977 MW-year across 100 projects at an average R$2.33 million per MW-year, with roughly R$64–64.5 billion in projected investments.
• The winners are predominantly thermal units, including about 90 gas-fired plants, three coal facilities and five hydropower expansions, with contracts lasting 10 years for existing assets and 15 years for new builds.
• The audit court (TCU) acknowledged pricing and design fragilities but let the auction proceed due to adequacy risks flagged by the system operator (ONS), which had even listed daylight saving time as a contingency option.
• Consumer and environmental groups forecast higher bills and more emissions, citing tariff increases of up to 10% and annual costs near R$39–40 billion, while the energy ministry argues the contracts replace costlier, less flexible plants and could avert a 24% hike.
• Petrobras said it secured eight thermal plants with an estimated R$4 billion in fixed annual revenue, and a second auction on March 20 will target existing oil- and biodiesel-fired units.