Renewable energy development in Brazil

Brazil currently has one of the cleanest energy matrix in the world  with 77% of all electricity supply coming from renewable energy sources, where 62% of all electricity supply coming from hydro power. However, currently Brazil is experiencing their worst drought since 1930 and going through the water crises, which put in danger the generation of electricity from hydro. This and many other factors are pushing the government toward the diversification and increasing of investment in the development of new green technologies.

Total energy consumption by type in Brazil

Source: ANEEL banc of information on generation, actualised on 28/01/2015

Accordingly to the IRENA country profiles the targets in Brazil were set to achieve 

In addition it has plenty of new energy resources to develop. Apart from huge deposits of offshore oil, gas and hydro power, it disposes huge potential for solar and wind energy. The world’s largest sugarcane crop provides bagasse, a fibrous residue which burns in high-pressure boilers. The country may also have shale gas (the Economist, 2013).

Accordingly to the IRENA country profiles the targets in Brazil were set to achieve increase by 16% of electricity generation from renewables (except hydro power) by 2020:

·           16% of electricity generation from renewables (excluding large hydro) by 2020

·           11.5 GW of wind capacity by 2020

·           9.2 GW of biomass-fired capacity by 2020

·           6.4 GW of small hydro capacity by 2020

Nowadays small hydro stations generates already 4.7 GW and 2.3 GW are planning or under construction. Wind energy accounts for 5GW in operation and 10.2 GW planning or under construction. Solar energy however hangs behind with 20 MW in operation and 50 MW planned (ANEEL data, 2015).

In 2012 ANEEL (National Energy Agency) established the normative resolution Nº 482, which represents the general conditions for net-metering system for mini and micro electricity generation. The idea of this system is to enable the distribution and use of self-generated energy, e.g. when the electricity generation system produces more electricity than current electricity consumption, the surplus is injected in the electricity network which could be used later when the consumption is higher than generation. Thus houses and small commerce could generate their own electricity and get the credit for this generation to use it after when they need the energy from the greed.

Brazil has the experience of organising the “solar only” energy auction, firstly made for Pernambuco region and in 30 October 2014 for the Federal Reserve energy. (EPE, 2014). However, the initial price was very low for current electricity companies, which was set in average at R$228.63/MWh (ibid).

Brazil currently has no solar feed-in tariffs policy, while this policy could help as well solar energy to reduce its cost. From 2002-2006 due to help of feed-in tariffs integrated in the programme “PROINFA“, the cost of wind energy dropped from $150 per MWh to $53 per MWh in 2011 auctions (Chadha M., 2014).

Despite high costs of solar energy Brazilian government decided to support its use for certain social projects. There are several joint projects between electricity distribution companies and institutions for electrification of rural regions. The Program “Light for all” (“Programa Luz para Todos”) was implemented in Minas Gerais by Electricity Company CEMIG, which installed photovoltaic systems for 285 000 consumers in rural areas from 2004 till 2011, the same program substitute Sunlight Program (“Programa Luz Solar”) in the Northeast Region and the National Program for Rural Electrification.

Moreover, some states introduced the tax incentives for solar energy. According to the Agreement ICMS 75/11 (Tax on Circulation of Services and Goods) solar modules become a tax exemption on ICMS that exclude the double taxation of consumer. In addition, Brazilian government together with Germany started the researches in new solar energy technology as concentrated solar power (CSP) and plan to construct the first CSP plant in Petrolina (Schlipf, 2014).

The development of solar energy use is gaining momentum in Brazil. Once successfully implemented program aimed at increase in use of solar energy for water heating in houses (“Minha casa, minha vida”), opened new perspectives for the following use of solar panels to produce electricity. According to the Brazilian National Department of Solar Heating (DASOL), the production of water heating solar collectors grew by almost 19% in 2009 and more than 21% in 2010. Same results are likely to be achieved with new photovoltaic legislation and incentives, thus creating great opportunities for the emergence of a strong photovoltaic industry in Brazil.