Thanks to its vast hydro resources and an ongoing boom in wind and solar installations, Brazil will get 96% of its electricity from renewable sources by 2028, according to the International Energy Agency’s forecasts.
In context: Renewables met 90.2% of the country’s power requirements in 2023, while low-carbon nuclear comprised another 2.2% of the mix, according to data collated by research group Ember. The share held by fossil fuels declined to 7.6%, from 10.9% the year before.
The world’s ninth-largest economy still sources the bulk of its electricity (67%) from hydro plants, but wind and solar are taking an ever-larger share.
In 2023, wind turbines produced 14.2% of the nation’s power — up from 8.1% just five years before. Solar farms, meanwhile, accounted for 7.6% of the mix, up from a mere 0.6% in 2018.
That excludes contributions from distributed solar — primarily on the roofs of homes and businesses — which effectively reduces demand for power from the national grid. Statistics from Absolar show that Brazil’s distributed solar capacity was at 26.3GW at the end of 2023.
For context, Brazil’s wind farms have a combined capacity of 29.5GW, while its solar farms have a total nominal capacity of 11.8GW, according to data from the country’s electricity regulator, ANEEL.
Looking forward: By 2028, wind and solar will make up 38% of annual electrical output, per the IEA.
The rapid shift to variable renewables will be largely driven by a surge in solar capacity additions, plus some new onshore wind projects.
Meanwhile, the seeds of a large-scale offshore wind industry are currently being sown, although those projects will only come online from the end of the decade.
According to Brazil’s wind energy association, ABEEólica, environmental authorities are considering 78 offshore wind project proposals that would collectively add 182GW of generating capacity to the grid.
A pioneer: Brazil’s shift to low-cost variable renewables was initially driven by an innovative state-led procurement programme.
The country pioneered the use of renewable energy auctions in the early 2000s as part of a second wave of reforms aimed at addressing energy security concerns, a new book edited by researchers at the University of Cape Town’s Power Futures Lab explains.
“The renewable energy auction is now the most widely used policy tool for procuring utility-scale renewable energy projects across the globe, driven, in large part, by its ability to reveal prices and reduce costs through the power of competition,” says the book, which punts “lessons from the Global South”.
But while Brazil’s auction system has grown more sophisticated over time, and still plays a key role, the IEA says it’s no longer the primary driver of new capacity additions.
The free market, in the form of corporate power purchase agreements and private installations of solar systems, is now firmly in the driver’s seat.
In the five years to 2028, Brazil will add 108GW of new renewable energy capacity — almost double the amount added in the previous five years, the agency says.
That’s largely because companies, particularly industrial ones, are turning to long-term bilateral contracts with renewable energy developers to ensure price certainty and fulfil their decarbonisation goals.
The IEA notes that while grid capacity is becoming a challenge for large-scale power projects, recent tenders for new high-voltage transmission lines should ease transmission constraints.
Meanwhile, although the country recently reduced its net-metering incentives for rooftop solar projects, that market is still growing fast.
“Low investment costs and high electricity prices due to volatile hydropower output… continue to drive high adoption” of distributed solar systems, with additions expected to average more than 7GW per year through 2028, the IEA says.
The emerging hydrogen economy: While Brazil is primed for an offshore wind boom — it could install more than 1,200GW in its waters, according to a study by the World Bank — there’s not enough demand for all of that electricity.
“That’s where green hydrogen comes into play,” Elbia Gannoum, president of ABEEólica, wrote in a recent report for the Global Wind Energy Council (GWEC).
Power from offshore wind could be used to produce green hydrogen, and the combination of the technologies “could consolidate Brazil’s standing as a renewable energy superpower,” Gannoum said.
Green hydrogen, an emerging industry that state-owned energy giant Petrobras is keen to drive, could in turn be used to produce low-carbon fertiliser, chemicals, food and steel, and exported to other countries.
To pave the way forward for those offshore wind projects, regulators have set guidelines on the use of maritime space and created a one-stop-shop for project licensing.
“The challenge for the future is to consolidate policies and establish a strong regulatory framework for offshore wind and green hydrogen in order to provide the appropriate conditions for industry to invest so that Brazil can lead the way to a just energy transition in the region,” GWEC said in its report.
