Brazil secures 19 gigawatts at power capacity auction to strengthen energy supply (updated)

Axia Energia SA

18/03/2026 21:16

Adds quote in paragraph 3; context in paragraph 5 and 8, shares move in paragraph 7

By Leticia Fucuchima

SAO PAULO, March 18 (Reuters) - Brazil secured the capacity for up to 19 gigawatts of electricity from thermal and hydro power stations over the coming decade or more on Wednesday, representing the biggest ever power deal of its kind in the South American nation.

The government held the auction to secure back-up power capacity starting this year for periods of high demand or scarce supply. Contracts for power from existing plants as well as projects yet to be developed were awarded.

"Today is a historic day for the Brazilian power sector and for the next 10 years of energy security in Brazil," Minister of Mines and Energy Alexandre Silveira said in a statement.

The winning projects, which include plants developed by companies such as Petrobras PETR3.SA, Eneva ENEV3.SA, Axia Energia AXIA5.SA, and Copel CPLE3.SA, are expected to require them to invest some 64.5 billion reais ($12.35 billion), according to the auction results.

As solar and wind power increase their presence and importance in Brazil's energy portfolio, the South American country has begun to require other plants capable of quickly coming online whenever solar and wind production declines.

The auction winners, which will supply backup power capacity to Brazil, were the projects that proposed the highest discount to the payment they will receive from the government. That disbursement is made with money that will come from consumers' energy bills, the government said, rejecting concerns from consumer groups that it could lead to higher prices.

Thermal projects - including gas or coal-based - from Brazilian firms Ambar Energia, Eneva and Petrobras, as well as from a unit of Turkey's Karpowership, were awarded at the auction, as were hydro projects from local companies Axia Energia and Copel, and from units of France's Engie and China's SPIC.

Shares in Eneva ENEV3.SA jumped 15% on Wednesday, while Copel rose 5.6%, the highest two gains in Brazil's benchmark Bovespa .BVSP index, which fell 0.4%.

The inclusion of coal in the auction surprised environmentalists, who criticized President Luiz Inacio Lula da Silva for failing to follow his own calls for countries to move away from fossil fuels when he led last year’s global climate summit.

The largest electrical power contract in Brazil before Wednesday's deal took place in 2009, when the country awarded the contract for the Belo Monte hydro power plant, an 11-gigawatt project.

($1 = 5.2211 reais)

(Reporting by Leticia Fucuchima in Sao Paulo, Writing by Andre Romani; Editing by Natalia Siniawski)

((Andre.Romani@thomsonreuters.com; 11 991314109;11 56447500;))