Energy Newsletter – July 2026

On July 21, 2026, the MME published Ordinance No. 140/2026, regulating the compensation for generation curtailments of wind and solar photovoltaic power plants, as provided for in Federal Law No. 15,269/2025.

In this context, the Ordinance governed the treatment of curtailments that occurred between September 1, 2023 and November 25, 2025, limiting compensation to events arising from external unavailability and electrical reliability, and not covering curtailments related to energy oversupply.

Interested project owners wishing to join the mechanism were required to submit a preliminary expression of interest within 20 days from publication of the Ordinance, a stage that has already closed. From this point, the procedure proceeds to the submission of documentation, the calling of eligible agents and the execution of the Commitment Agreement. In addition, the Ordinance established a 60-day period from its publication for the Energy Trading Chamber (“CCEE”) to approve and publish the Trading Rules and Procedures required to implement the mechanism.

Finally, participation will be irrevocable and non-retractable and will entail a waiver of administrative, arbitral or judicial claims relating to generation curtailments and the associated reimbursements. The National Grid Operator (“ONS”) will be responsible for assessing and classifying the curtailments, while the CCEE will calculate and operationalise the financial compensation within the accounting and settlement of the Short-Term Market (“MCP”).

From a legal perspective, any decision to join the mechanism requires an individual assessment of its effects, including the legality and internal approval of the relevant instrument, the impacts on Power Purchase Agreements in the Regulated Market and Reserve Energy Agreements, ongoing lawsuits and arbitration proceedings, as well as any potential implications for financing agreements, covenants and debt structures. The effects on self-production arrangements should also be assessed, including with respect to risk allocation and any requirement to obtain consent from offtakers, as well as the implications for future M&A transactions.

For further information on the compensation mechanism, its requirements and key points of attention, please see our report on the topic.

ANEEL opened Public Consultation No. 19/2026 with a view to improving the tender notices for the A-1, A-2 and A-3 Existing Energy Auctions. The auctions will contract energy from projects already in commercial operation, with supply commencement in 2027, 2028 and 2029, respectively. The contracts will have a term of two years.

The Public Consultation proposal provides for the sequential holding of the auctions, commencing on November 13, 2026, and increases the financial guarantee required from sellers, from three months to one year of sale revenue. In the A-2 and A-3 auctions, sellers must submit this guarantee at least six months prior to the commencement of supply. The measure seeks to reduce the financial impact on distribution companies in the event of non-performance of the contracts.

The consultation will also discuss the delivery sub-market for the energy. Currently, the seller indicates the delivery region, whilst the distribution companies are exposed to price differences between sub-markets. The proposal considers transferring delivery to the buyer’s sub-market, with the aim of adjusting the allocation of these risks in the energy purchase and sale agreements.

Interested parties may submit contributions until August 24, 2026.

On July 21, 2026, ANEEL’s Board of Directors analysed an administrative appeal challenging the tender-related fine imposed for non-compliance with the implementation schedule of a thermoelectric power plant, as set out in the New Energy Auction No. 06/2014-ANEEL (A-5 type), and upheld in full the penalty imposed by the technical department, in the amount of R$ 235,606,269.60.

In this context, ANEEL reinforced that the application of the contractual fine does not depend on the prior quantification of losses, given that the penalty does not have a compensatory nature. According to the position adopted by the Agency, tender-related sanctions serve preventive, educational and repressive functions and seek to ensure compliance with the obligations assumed by the agents and the preservation of sectoral planning.

In addition, ANEEL highlighted that the determination of the fine amount must observe duly reasoned calibration criteria. In the case analysed, the technical department applied a previously defined parametric formula, although the vote recognises that room remains for administrative discretion in setting the penalty, provided that the grounds relied upon are expressly stated and may be contested by the agent.

Finally, the Board reaffirmed that the imposition of a fine may be cumulated with other consequences set out in the tender notice, including the termination of the authorisation, given that the termination of the legal relationship does not extinguish liabilities arising from prior non-compliance.

ANEEL’s Board of Directors approved new guidelines for the application, by the CCEE, of the self-generation rules set out in Article 16-B of Federal Law No. 9,074/1995, as amended by Federal Law No. 15,269/2025. To be treated as equivalent to a self-generator, the consumer must hold aggregate contracted demand of at least 30 MW, formed exclusively by consumption units with individual demand equal to or greater than 3 MW. ANEEL also defined that consumers classified as equivalent under the previous legislation must regularise their situation, where necessary, to comply with the new criteria.

The guidelines also detail the corporate requirements for classification as an equivalent self-generator. Direct or indirect participation in the company holding the authorisation must take into account voting share capital, with the CCEE being responsible for assessing each corporate structure to identify control, affiliation and common control relationships. Where shares without voting rights carry economic advantages greater than those of voting shares, the CCEE must verify compliance with the minimum 30% participation requirement set out in law, on the basis of documents such as articles of association, shareholders’ agreements and financial statements.

With regard to small-capacity power plants, ANEEL Order No. 2,414/2026 established that, from November 25, 2025 onwards, only assets holding an authorisation may be registered with the CCEE for self-generation purposes, both in the strict sense and by equivalence. For plants without an authorisation that had already been modelled prior to Federal Law No. 15,269/2025, ANEEL established a transitional period of up to three years. Such plants, with installed capacity of up to 5 MW, are legally exempt from the authorisation requirement, with only registration with ANEEL being required.

However, with regard to plants without an authorisation, one specific ANEEL Director adopted a divergent position when analysing an appeal submitted by the Brazilian Association of Small Hydroelectric Power Plants and Hydroelectric Generation Centres (“ABRAPCH”), and resolved to suspend, on a precautionary basis, items (ii) and (iii) of Order No. 2,414/2026, relating, respectively, to the authorisation requirement for the registration of self-generation assets from November 25, 2025 onwards and the transitional period of up to three years for plants without an authorisation already modelled prior to Federal Law No. 15,269/2025. The Director considered that the new law did not expressly remove the possibility of small-capacity projects operating as self-generators in the strict sense. The suspension will remain in force until the Board of Directors issues a final decision, with no specific deadline established as yet, and does not extend to the remaining guidelines of the order, which continue to apply.