This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 8/10/2017

Overview
Brazil is Latin America’s largest renewable energy market. Brazil’s commitment to renewable energy is still strong and continued investment is expected in wind, solar, and hydropower capacity growth.
Brazil generates nearly 76 percent of its electricity from renewable resources. While wind and hydropower have been the major source of Brazil’s renewable energy expansion, new solar energy developments over – provided Brazil creates an encouraging investment framework – could potentially rival investments in wind power.

With growth occurring in almost every energy subsector, large hydropower still accounts for the vast majority of Brazil’s energy capacity. Large hydropower dams account for 93 gigawatts (GW) of Brazil’s total energy capacity. Other renewable energy technologies include 86 GW for biomass and waste-to-energy; 4.77 GW for small hydropower; and 8.99 GW of installed wind power.


Leading Sub-Sectors

Wind
Wind capacity in Brazil (the largest in Latin America with nearly 9 gigawatts (GW) of installed capacity), should continue to buttress renewable energy growth for the near future. As an established power source in Brazil, wind has been removed from the renewable specific energy auctions. It is now sold in the conventional energy auctions alongside hydropower and energy from fossil fuels, a sign of its maturity in the market.

Brazil enjoys one of the world’s strongest wind resource bases; and as only hydropower provides lower cost per kilowatt in the Brazilian energy matrix, wind is likely to draw increased investment. According to the Brazilian government’s Energy Research Agency (EPE), the wind industry would need to install 17 GW of new wind capacity over the next decade to meet the country’s target of 24 GW of installed wind generation capacity by 2024. Economists predict that investment in wind energy will reach US$24.5 billion by 2020.

Wind service providers likely have the best opportunities since component suppliers face strong competition from local manufacturers that benefit from advantageous financing terms from Brazil’s state owned development bank (BNDES). Resource mapping, turbine design, environmental impact assessment, and other consultancy services are likely to be in high demand and should offer opportunities for
U.S. companies.

Hydropower
Despite the emphasis on wind and solar by Brazilian policymakers, they have not completely abandoned large hydro, which currently generates about two-thirds of the country’s electricity. According to the Ministry of Mines and Energy, Brazil will attempt to increase hydropower capacity by 27 GW by 2024.

Some export opportunities will result from changes in Brazil’s hydropower market. The lack of production from some of Brazil’s largest hydropower dams due to recent droughts increased the awareness in the Brazilian energy sector, both private and public, that Brazil must diminish its dependence on large hydropower. The resulting shift in perception could open Brazil’s existing market to the expertise of engineering firms that can increase efficiency and generation capacity in existing dams through technological and engineering services. Small hydropower, an area where U.S. technology is often highly competitive, has also been steadily increasing in Brazil.

Solar
Today, solar power accounts for only 0.02 percent of Brazil’s total installed electricity generation, at about 27 MW. However, a further 2.2 GW has already been tendered. Upon installation, the tendered power will represent a 750 percent increase of installed solar power capacity.

Brazil’s solar insolation resources could yield impressive medium-term growth opportunities. By 2024, Brazil forecasts that it could bring up to 7 GW of solar generation capacity online. BNDES alone (Brazilian Development Bank) expects to invest US$2.5 billion in solar development through 2018. With a solar distributed generation regulation already in place, investments in this area alone could reach US$25 billion by 2030.

A significant development for Brazil’s solar strategy was the recent enactment of new rules by Brazil’s National Electric Power Regulator (ANEEL) aimed at reducing barriers for the incorporation of distributed solar power. The enacted resolution:

  1. expands the net metering program by allowing small-scale power generators of up to 5MW to offset their electricity bills with credits from the energy they provide to the grid;
  2. allows participating consumers to distribute net-metering credits among multiple electric service accounts, for instance, on a multi-tenant commercial property or a residential apartment building;
  3. introduces the concept of shared/community solar, allowing several energy customers to share the benefits of a solar power generating facility as one single consumer;
  4. allows for the net-metering credits obtained and not used by the generating facility to offset the excess energy consumption of other sites provided that (i) both sites are serviced by the same distribution concessionaire; and (ii) ownership of both sites is the same;
  5. establishes that the credits obtained by the solar power producer expire after 60 months.
For U.S. exporters, the opportunity is now – and will likely diminish over time. Through 2017, BNDES’ local content requirement (LCR) rules mandate that solar modules be assembled in Brazil, but cells and other equipment can be imported. This will change as LCR percentage mandates increase. U.S. exports should find some opportunities in the short-term. As Brazil does not currently have a complete solar supply chain in country, imports will be required.​

Polysilicon producers, wafer manufacturing, and solar cell providers should all find opportunities. Solar project developers and other service providers may find more lasting opportunities, as the market expands over the reminder of the decade.

Opportunities
In 2014, renewable energy investment was catalyzed by one of the worst droughts in Brazilian history, which reduced power generation at some of its most important hydroelectric facilities and even stoked talk of power rationing and electricity rate spikes.

The country’s ongoing drought could even lead to electricity shortages in the near-term, potentially creating a market opportunity for distributed renewable energy providers, particularly roof-mounted solar PV. In the longer-term, the economic realities caused by the drought may shift the Brazilian Government’s support towards renewables even further.

On 2009, Brazil began a series of successful reverse auctions to govern and facilitate the deployment of renewable energy technologies. Through the reverse auction system, which has since been duplicated in other markets around the world, developers seeking to build renewable energy projects compete against other developers in blind auctions to deliver projects at the lowest cost per kilowatt hour. The auctions thus reduce the price paid by the Brazilian consumer for renewable energy, as developers are incentivized to offer the lowest possible cost.

For technology suppliers, the reverse auction system provides a long pipeline of planned and approved projects. Exporters are encouraged to seek out auction winners to facilitate export sales.


Web Resources

Key Local Trade Associations

Key Trade Shows in Brazil

Key Trade Shows in the United States:

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For more information about export opportunities in this sector, contact U.S. Commercial Service Industry Specialist: Igly.Serafim@trade.gov

 

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.



Brazil Renewable Energy Trade Development and Promotion