Brazil's grid committee adds 1.8 GW to guard against El Niño impacts

The Electricity Sector Monitoring Committee (CMSE) approved the early activation of 1.8 GW of generation from five firms that won the 2022 Reserve Capacity Auction (LRCE) and the 2026 Power Reserve Auction (LRCAP). The contracts will become effective on 1 September, providing additional capacity to the National Interconnected System (SIN) and helping to offset potential shortfalls caused by a forecast‑strong El Niño event.

The Ministry of Mines and Energy said the move also addresses geopolitical uncertainties that could raise fuel prices, and it is cheaper than using merchant (uncontracted) plants, which cost about 25 % more. The agency highlighted that the El Niño has an 81 % chance of becoming very strong between October and December, which could reduce hydro generation in the North and increase electricity demand due to higher temperatures. The reserve auctions contracted 2.2 GW of capacity, well below the 4.2 GW needed for peak demand, making the advance of these contracts a key security measure.

“The volume anticipated is essential to guarantee the security of Brazil’s electric system in 2026 and early 2027, especially given the potential consequences of El Niño,” the Ministry said.