Brazil 's Ministry of Mines and Energy has regulated the mechanism that will allow the recognition of around R$ 3.3 billion (more than USD 640 million) for wind and solar generation cuts suffered between September 1, 2023 and November 25, 2025.
Regulatory Ordinance No. 140/2026 establishes the procedure for signing the Commitment Agreement, reviewing recorded events, recalculating values, and implementing compensation. The process will take more than 300 days , and participation will be voluntary.
“There are around 40 companies affected by the power outages. The decree satisfies most of our demands, but not all,” said Elbia Gannoum , CEO of the Brazilian Association of Wind Energy and New Technologies (ABEEólica).
This difference between what the sector requested and what was finally approved makes it impossible to anticipate the level of participation.
“I can’t guarantee 100% participation, or even 50%. It’s too early to say,” the executive cautioned, alluding to the fact that the decision will depend on each affected company individually. Therefore, some claimants may consider the recognized credit sufficient, while others may choose to maintain their claims due to the excluded events or items.
The payment will not come from a new charge nor will it be transferred directly to consumers. Instead, the solution utilizes financial obligations already accumulated by the agents themselves within the Chamber of Electric Energy Marketing (CCEE).
According to the executive, within the chamber there are approximately R$ 6 billion (more than USD 1.175 billion) associated with generator liabilities for performance, contractual breaches or other obligations.
That amount will be cross-referenced with the credits corresponding to the owners of parks affected by the curtailment, and the difference will be resolved through an account reconciliation.
In theoretical terms, after recognizing the R$ 3300 million, a balance of approximately R$ 2700 million would remain within the system.
“There will be an accounting adjustment; there will be no tariff increase. In other words, payment is made with the available funds, and if those funds are insufficient, the generator will have to wait for those funds to be replenished, because there will always be something that must be paid to the CCEE (State Electricity Commission). This means that the funds will always appear, and the accounts will be reconciled without directly passing this cost on to the tariff,” the CEO of ABEEólica emphasized.
The regulation implements Article 1-B of Law No. 10,848/2004, incorporated by Law No. 15,269/2025. It also approves the model of the Commitment Agreement and distributes responsibilities between the Ministry, the National Electric System Operator (ONS) and the CCEE.
The first step will be to register the expression of interest through CELEBRA , the Interest Registration System for Compensation for Generation Cuts enabled by the Ministry of Mines and Energy.
From there, the ONS must review and reclassify the events that occurred within the covered period. The ordinance recognizes three categories: external unavailability, electrical reliability, and excess electricity supply.
Only cuts associated with external unavailability or electrical reliability problems will be eligible. Restrictions caused by oversupply, when the National Interconnected System cannot absorb all available production, are excluded.
When a single outage has more than one cause, the external unavailability classification will take precedence. The electrical reliability category will be used as a secondary consideration.
Events originating from transmission facilities under the responsibility of the generator itself, whether exclusive or shared, will also not be recognized.
The technical process will be lengthy. The ONS will have initial timeframes of between five and 20 days for certain reviews and up to 120 days to finalize the calculation of the cuts . Afterwards, the CCEE will have another 180 days to complete the economic assessment, update the contractual positions, and carry out the reconciliation.
“This entire process of implementing the commitment agreement will take about 300 days. It will take us almost a year to finalize this operation. That's normal, but everything is already done, the permit has been granted, it will be registered, and we are already contacting the companies,” Gannoum anticipated.
The directive clarifies that there will be no immediate deposit into agents' accounts. First, operational data must be validated, the causes of each restriction identified, and trade exposures recalculated.
While the financial treatment will depend on the market in which each power plant has sold its production.
In projects linked to Energy Marketing Contracts in the Regulated Environment, the reduced electricity will be considered delivered. This will allow for the reduction or elimination of penalties for supply shortages.
For transactions carried out in the Free Trading Environment, eligible amounts will be valued according to the Settlement of Differences Price of the submarket where each asset is located.
In the power plants included in the Program of Incentives for Alternative Sources of Electrical Energy, the settlement will be handled by ENBPar and will take as a reference the contractual prices in force at the time of each event.
All values will be adjusted using the Broad National Consumer Price Index (IPCA) from the date of the cut until effective recognition.
Adherence, however, will not be automatic. Each holder must sign a Commitment Agreement and definitively waive any administrative, judicial, or arbitral challenges related to the included facts.
Once the agreement is signed, the agent will have ten days to request the withdrawal of the ongoing legal action. The decision will depend on the contractual and procedural situation of each company.
Regulation pending since November 2025
The agreement only covers cuts that occurred up to November 25, 2025, so subsequent restrictions do not yet have a definitive solution.
“Since November 2025, there have been numerous power generation outages, a situation that will be regulated. The Ministry is analyzing this transition period to determine how it will be managed, as during this time the Commitment Agreement will be signed, regulations will be implemented by decree, and Resolution 1030 will be reviewed.”
Furthermore, the National Electric Energy Agency (ANEEL) has already appointed the rapporteur responsible for the procedure, with the aim of defining permanent rules for future episodes and reducing the uncertainty that currently affects the economic projections of the projects.
For ABEEólica, Ordinance No. 140/2026 resolves a relevant part of the accumulated liability, but does not close the discussion on curtailment.
“The issuance of the ordinance, the issuance of the commitment agreement is very relevant so that rules are established and agents can rely on them to make their investment decisions,” Gannoum emphasizes.
The executive believes that the lack of predictability jeopardizes the expansion of new wind and solar capacity, especially when projects must incorporate production losses that are not dependent on their operation.
"Generators can no longer withstand a situation with so much regulatory uncertainty," he warned.
The approved mechanism will thus become the first concrete reference point for resolving historical cuts using resources available within the CCEE. Its effectiveness will depend on the number of agents that participate, the reclassification carried out by the ONS, and the subsequent financial settlement.
“There is still a lot of work ahead in terms of regulation through the Ministry of Mines and Energy and the National Electric Energy Agency, which we will continue to work on,” concluded the CEO of ABEEólica.