Brazil Power Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Brazil Power Market is Segmented by Power Generation (Thermal, Hydropower, Nuclear, and Non-Hydro Renewables) and Power Transmission & Distribution (T&D)

Market Snapshot

Brazil Power Market Overview
Study Period: 2019-2027
Base Year: 2021
CAGR: >3.5 %

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Market Overview

The Brazil power market is expected to grow at a CAGR of more than 3.5% over the forecast period of 2022-2027. Due to the COVID-19 pandemic and the policy response, the country's power demand fell by 1.5% (-10 TWh) in 2020. This fall in demand has led to reduced generation from various fuel sources, including coal (-12.1%), oil & gas (-5.8%), -0.6% for hydro & bioenergy, and nuclear (-13.6%). In comparison, non-hydro renewables like wind and solar continued to rise by 2.6% (2 TWh) in 2020. Factors such as the increasing demand for clean and low carbon power sources and favorable government policies are expected to drive the power market in Brazil. However, the long delays in the construction of power transmission projects due to the logistical, environmental, and social challenges are likely to hamper the market during the forecast period.

  • As of 2021, the hydropower generation segment is dominating Brazil's power market, and it is expected to continue during the forecast period. Hydropower is the largest source of electricity in Brazil, and it has great potential with several large rivers making it an ideal location for hydropower projects.
  • Brazil has a strong future for coupling large-scale solar and wind power as the hybrid power plant. In December 2021, the Brazilian energy regulator, Aneel has, approved a new regulation for the operation of hybrid power plants. This, in turn, is expected to provide ample opportunity for Brazil's power market in the coming future.
  • The country has many ambitious renewable projects lined up. With enormous solar, wind, and hydro energy potential, the country is ready to leap into the renewable market. Moreover, the government regulates policies to attract foreign investment in renewable power plants. This, in turn, is expected to drive the Brazil power market during the forecast period.

Scope of the report

The Brazil power market report includes:

Power Generation
Thermal
Hydropower
Nuclear
Non-Hydro Renewables

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Key Market Trends

Hydropower to Dominate the Market

  • Hydropower has been active in Brazil for a long time. It is expected to continue to be the most dominating form of power generation, primarily due to its enormous potential. Further, hydropower helps to keep electricity tariffs low.
  • In 2020, the total installed hydropower capacity had reached more than 109 GW and stood as the hydropower leader in South America and the second-largest in the world, only after China. Around 213 MW of hydropower capacity was added in the country. In the same year, hydropower accounted for more than 60% of the country's annual power generation.
  • Hydropower is a mature technology in the country, and the scope for future growth may be limited at a large scale. However, the small hydropower projects are likely to increase in the coming years, which will have less impact on the environment and be more economical to build.
  • As of 2022, Brazil has about 195 MW of hydroelectric projects scheduled to start its commercial operations in 2022, including Elera Renováveis' Foz do Estrela small hydro unit. Further, the government has set an ambitious target to achieve hydropower capacity to 112.5 GW by 2030. This is expected to see significant developments in hydropower during the forecast period.
  • Brazil is also becoming a leader in developing hybrid energy projects with the recent development of a solar floating photovoltaic plant on the Furnas-owned 52 MW Batalha hydropower project reservoir. In 2020, Tractebel was awarded the contract to build the 15-hectares floating plant of 30 MW installed capacity.
  • This, in turn, with the upcoming hydropower projects and targets, along with the massive hydropower potential in Brazil, the hydropower generation segment is expected to dominate the power market during the forecast period.
Brazil Power Market

Supporting Government Policies and Ambitious Renewable Target to Drive the Market

  • Over the years, hydropower has been dominated the energy matrix in Brazil. However, the Brazilian government has been focusing on increasing wind and solar power capacity in recent years. In 2020, Brazil achieved a historic mark and its target of 7 GW of operational solar power, according to Associação Brasileira de Energia Solar Fotovoltaica (ABSolar).
  • The renewable power sources solar and wind have witnessed a significant rise in recent years. In 2020, the total installed solar power capacity reached more than 7.8 GW, a rise of more than 70% compared to the 4.7 GW in 2019. Similarly, wind power has recorded an 11% growth in 2020.
  • Further, the Ministry of Mines and Energy and the state-run Empresa de Pesquisa Energetica (EPE) agency have recently given the National Energy Plan (PNE) up to 2050. The government of Brazil has set a renewable energy target of around 45% by 2030 under the new strategy. This is expected to witness massive development in the renewables power sector in Brazil.
  • In January 2022, a Brazilian renewable energy company Ibitu Energia announced its construction on a 1 GW solar power complex in Piaui state. With an initial investment of about BRL 1 billion (USD 181 million), it is planned to be built in three stages. With such projects, the government prioritizes renewable energy projects, which in turn helps boost the country's power market during the forecast period.
  • Further, in January 2022, a Norwegian hydropower company, Statkraft, planned to start the construction of an 80 MW wind power project in Brazil. The construction is planned to begin in June 2022, and the first wind turbines are expected to start operation by October 2023, and completion is scheduled by 2024. With an excellent wind potential in the area, the project is expected to generate about 386 GWh of renewable energy per year, enough to power more than 190,000 homes in Brazil.
  • Moreover, the Brazilian wind power installation is expected to grow from around 21 GW at the end of 2021 to more than 32 GW by 2026, according to the Brazilian Wind Energy Association, ABEEólica.
  • Therefore, the factors mentioned above and the rising investments in renewables are expected to see significant developments and drive the Brazil power market during the forecast period.
Brazil Power Market

Competitive Landscape

The Brazil power market is moderately fragmented. Some of the major companies operating in the market include Norte Energia SA, Petróleo Brasileiro SA, Enel Brasil, Eletrosul Centrais Elétricas SA (CGT Eletrosul), and Transmissora Aliança de Energia Elétrica SA among others.

Recent Development

  • In November 2021, a Germany-based energy company Siemens Energy secured a USD 1.1 billion turnkey construction contract from Gás Natural Açu (GNA) to build a 1.7GW combined cycle power plant, UTE GNA II, in Brazil. The plant is to be developed as a part of GNA II, an integrated liquefied natural gas (LNG) to power project, at Port of Açu in Rio de Janeiro. The project involves building two thermal power plants and an LNG regasification terminal based on a floating storage regasification unit (FSRU) and substations. The transmission lines will link the plants to the national interconnected system.
  • In March 2022, the government of Brazil signed a cooperation agreement with the Electric Energy Research Center to study new sites for nuclear plants in Brazil. Increasing the share of thermonuclear sources in the country's energy matrix is expected to reduce the impacts of water crises on electricity generation.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Scope of the Study

    2. 1.2 Market Definition

    3. 1.3 Study Assumptions

  2. 2. EXECUTIVE SUMMARY

  3. 3. RESEARCH METHODOLOGY

  4. 4. MARKET OVERVIEW

    1. 4.1 Introduction

    2. 4.2 Power Installed Capacity and Forecast in GW, till 2027

    3. 4.3 Electricity Generation Mix in Brazil, 2020

    4. 4.4 Electricity Generation in TWh, 2020

    5. 4.5 Electricity Import trends in Brazil, 2010-2020

    6. 4.6 Recent Trends and Developments

    7. 4.7 Government Targets, Policies and Regulations

    8. 4.8 Market Dynamics

      1. 4.8.1 Drivers

      2. 4.8.2 Restraints

    9. 4.9 Supply Chain Analysis

    10. 4.10 PESTLE Analysis

  5. 5. MARKET SEGMENTATION

    1. 5.1 Power Generation

      1. 5.1.1 Thermal

      2. 5.1.2 Hydropower

      3. 5.1.3 Nuclear

      4. 5.1.4 Non-Hydro Renewables

    2. 5.2 Power Transmission & Distribution (T&D)

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Mergers and Acquisitions, Joint Ventures, Collaborations, and Agreements

    2. 6.2 Strategies Adopted by Leading Players

    3. 6.3 Company Profiles

      1. 6.3.1 Norte Energia S.A.

      2. 6.3.2 Petróleo Brasileiro S.A.

      3. 6.3.3 Enel Brasil

      4. 6.3.4 Eletrosul Centrais Elétricas SA (CGT Eletrosul)

      5. 6.3.5 Transmissora Aliança de Energia Elétrica SA

      6. 6.3.6 Engie SA

      7. 6.3.7 State Grid Brazil Holding SA

      8. 6.3.8 Neoenergia SA

      9. 6.3.9 Omega Energia SA

    4. *List Not Exhaustive
  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

**Subject to Availability

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Frequently Asked Questions

The Brazil Power Market market is studied from 2019 - 2027.

The Brazil Power Market is growing at a CAGR of >3.5% over the next 5 years.

Norte Energia S.A., Petróleo Brasileiro S.A., Eletrosul Centrais Elétricas SA (CGT Eletrosul), Transmissora Aliança de Energia Elétrica SA, Enel Brasil are the major companies operating in Brazil Power Market.

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