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Renewable energies in Brazil: more than $80 billion in investments expected over the next 10 years

Driven by the need to act on the climate emergency, the renewable energy sector is one of the most dynamic in the global economy.

In this race towards carbon neutrality, Brazil’s energy balance stands out favorably: access to electricity is almost assured throughout the country and renewable energies meet nearly 45% of primary energy demand, which makes the Brazilian economy one of the most low-carbon.

In 2021, new investments in renewable energy amounted to more than $11.5 billion. Brazil’s foreign investment attraction strategy makes it a priority sector. This is supported by several legislative modernizations that accelerate the liberalization of the electricity market and contribute to providing a more stable business environment. Last July, the Brazilian federal government launched a process aimed at increasing the privatization of Eletrobras, the largest electricity company in Latin America. State participation should thus drop from 60% to 45% and increase the company’s investment capacity.

The diversification of the Brazilian energy portfolio is strongly encouraged by the State, which realizes that the predominance of hydroelectricity puts the country at risk. Brazil actually came close to an energy crisis in the summer of 2021 as its reservoirs were drained by a historic drought. Some 95% of auctions intended to develop the electricity sector are now allocated to wind and solar farms.

Brazil already has the largest wind capacity in South America with more than 19 gigawatts (GW) installed. However, according to the Brazilian Wind Energy Association, ABEEólica, its production potential would amount to 500 GW. Solar production is the fastest growing. Investments in this sector are expected to reach US$20 billion by 2030.

Promising terrain for Quebec businesses

The dynamics that characterize the Brazilian electricity market show many similarities with those of Quebec since Brazil is also the second largest producer of hydroelectricity in the world. As in Quebec, its system is based on a vast transmission network that connects hydroelectric power stations to urban centres. In addition to the infrastructure inherent in new projects, the modernization of the network should accelerate over the next few years.

“The potential is enormous and involves the entire supply chain,” explains the director of the Quebec Office in São Paulo (BQSP), Jason Naud.

“Brazil’s regulatory complexity should not discourage investors and exporters,” he continues. In collaboration with Investissement Québec International, the BQSP team supports Québec companies by providing them with strategic information, including information relating to best implementation practices and financing options, as well as by promoting contacts with major principals and potential buyers. Recently, the BQSP supported the establishment in Brazil of the Quebec company OPAL-RT, which specializes in particular in simulation systems for electrical networks.

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