The electric power sector is facing a cost crossroads. Five crucial issues, from energy storage to curtailment compensation, all point to a single question: who will shoulder the expenses?
Brazil’s electric power sector reaches the end of 2026 with a series of ongoing regulatory discussions. The complexity of these agendas, ranging from energy storage to subsidy management, raises a central question: how to cover the costs to ensure system stability and modernization? The lack of a coherent design for these decisions generates legal uncertainty at a critical moment for Brazil.
Lawyers and experts point out that regulatory uncertainty increases risks and, consequently, costs for the entire system. The five main loose ends identified deal with the allocation of essential expenses for the security and enhancement of the national power grid.
Batteries: an ongoing auction, but with the bill still open
The National Electric Energy Agency (Aneel) is moving forward with auctions for battery energy storage systems, which are essential for providing operational flexibility to the National Interconnected System (SIN). The proposal under public consultation suggests splitting the contracting cost among generators based on the flexibility each plant offers. However, this regulation of the current law is taking place parallel to a bill in Congress that aims to change precisely this responsibility for payment.
The capacity reserve auction for batteries, scheduled for December, aims to contract capacity for peak hours, allowing solar energy to be stored during the day and returned in the late afternoon. Despite the large number of registered projects, the definition of who will bear the financial charge—stipulated by law for generators—remains a subject of dispute among sector agents, consumer associations, and utilities.
Kamila Bezerra stated:
Legal uncertainty is bad for everyone. It creates risk, and risk creates cost.
The concern is that while Aneel regulates the current law, Congress may approve new legislation, creating room for litigation and financial imbalance in already established projects.
Curtailment: solutions for the past and uncertainties for the future
The issue of curtailment—meaning the generation cuts at renewable plants when the system cannot absorb the energy—has gained new rules for the future. Aneel approved a regulation establishing criteria for these cuts, with an adaptation period followed by more definitive economic enforcement. However, compensation for liabilities generated by past cuts remains an open issue.
A recently approved law seeks to mitigate some of the accumulated losses suffered by generators, allowing compensation through adherence to an agreement. However, discussions regarding which cuts are eligible and the value actually recognized persist. The resolution on compensation for generation curtailments is expected to be debated in a public consultation still in 2026.
Capacity Reserve: modernization in the crosshairs
The modernization of how the Capacity Reserve Power Charge (Ercap) is distributed is another front under discussion. The proposal aims to align the fee more closely with system peak consumption, making consumers who use the most energy at critical times contribute proportionally more. This change seeks to create incentives for load shifting and expand demand response participation, which can also help reduce curtailment.
Rosi Costa Barros stated:
Hourly tariffs will also benefit the system. Hourly exposures already happen today through CCEE calculations in the free market.
The inclusion of generators in the charge distribution is also on the agenda, aiming for a cost allocation more closely aligned with the system’s capacity needs.
PLP 100: a fiscal brake for charges and subsidies
In a broader approach, Complementary Bill 100/2026 proposes establishing general rules of governance, transparency, and accountability for funds, charges, and subsidies in the electric sector, inspired by the Fiscal Responsibility Law. The initiative aims to prevent the disorderly creation of new expenses without proper impact analysis and funding sources, targeting the Energy Development Account (CDE) in particular.
The proposal seeks to streamline the creation of charges and subsidies, requiring impact estimates and financing sources. Rosi Costa Barros argued:
The Treasury would have to have a reserve earmarked for the CDE budget, to lift the weight off agents and consumers, especially.
The approval of this bill, however, requires an absolute majority in Congress, which represents a major challenge.
Given this scenario, the convergence of these five regulatory fronts demonstrates the complexity of defining who pays the bill for investments and the security of Brazil’s electricity system. Resolving these issues is fundamental to ensuring predictability and attractiveness in the sector, which is essential for the country’s energy transition.
