Brazil: Renewable Energy In Latin America - Brazil

Last Updated: 24 May 2016
Article by Simon Currie

The opportunity

The opportunity

Brazil has a well-developed hydro and renewables sector that represent more than 39 per cent of the overall internal energy supply, and more than 78 per cent of the installed capacity. Nonetheless, there is unexploited potential in sectors such as wind, solar and floating solar PV. Indeed, Brazil is considered a very attractive market for low-carbon investments. The Bloomberg Climatescope report placed Brazil as the second most attractive market in the world and the EY Renewable Energy Country Attractiveness index ranked Brazil ninth out of 40 countries (best ranked in Latin America). The rising demand for energy is a key driver for development of renewable energy in the country.

Although there are no legislative targets for increasing alternative energy use, Brazil has recently committed to expand non-hydro renewables to 20 per cent of electricity supply by 2030. In 2013 the country launched the Ten Year for the Expansion of Energy 2023 where it set a target of increasing total installed capacity from 124GW to 195GW. The focus of this 71GW expansion is on hydro power (32GW) followed by wind (20GW), biomass (4GW), solar (3.5GW) and small hydro (2GW).

Between 2008 and 2012 new investment in renewable energy varied between US$7.2 billion and US$12.1 billion, falling to US$3.9 billion in 2013. The 2013 downward trend was caused by worries about policy support, reductions in technology costs, as well as a delay between auction rounds. In 2014 Brazil climbed back into the top ten countries for investment in renewables, and was the second of the developing economies. In 2014 approximately US$7.4 billion was invested in renewables – double the 2013 total. Wind attracted 84 per cent of the investment (US$6.2 billion), 117 per cent more than in 2013. A notable driver of renewable energy investment in Brazil is the government's online three stage reverse auction process where new power projects are introduced for private development three (A-3) to five years (A-5) in advance of delivery dates for the lowest possible cost.


The wind sector attracts most investor attention with an estimated current potential of an incredible 300GW. The wind power generation capacity grew 891 per cent between 2009 and 2014 and attracted 84 per cent of the investments destined for renewable energy in 2014. 2015 ended with 281 plants in operation with an installed capacity of approximately 7.1GW. Compared other BRIC countries India (20GW) and China (90GW), this leaves Brazil with considerable room to grow and significant unutilised potential.

Solar power is an unexplored energy source in Brazil despite its tremendous potential, particularly in the north east region where the solar radiation is of between 5.700–6.100 kWh/m² per day on average. The annual average solar radiation for the country is 1.200–2.400 kWh/m²/year. This is higher than Germany which is a well-established solar player with an annual average solar radiation of 900–1.250 kWh/m²/ year. Despite the high initial costs, solar micro and mini generators could be an effective solution for the difficulties faced in north and north east regions in terms of energy access.

The hydro sector is likely to continue to attract investment due to its 260GW potential of which 40 per cent is located in the Amazon region.

Support regimes

Law 12.187/2009 established the National Policy on Climate Change (NPCC). The NPCC establishes the expansion of renewable and clean energy usage as a part of the national strategy for medium-long term.

The Incentive Programme for Alternative Electric Energy Source – PROINFA is also highlighted in the national plan. It was created in 2002 to encourage the development of wind energy, biomass and small hydro, which has been successfully implemented, particularly for wind power which increased its installed capacity from 22MW in 2002 to the current 7.1GW.

Biofuel is the energy source with maximum tax incentives for importers and producers, offering significant deductions in two tax categories: theSocial Integration Program and the Contribution to the Social Security Fund.

In 2012 a new Electric Energy National Agency resolution (482/2012) came into force, to facilitate the connection of small renewable power generation plants to the distribution grid. The mini and micro generators can request the local distributor for grid connection.

The resolution also proposes the creation of an energy compensation system (net metering), whereby the owner of a small plant does not need to consume all the energy produced at the time of generation. Excess electricity can be fed into the grid giving the generator energy credit that can be used within 36 months.

One of the major challenges was transmission infrastructure, which created delays in grid connection for renewable energy developers. This was overcome through a new regulation. Developers who seek to build renewable energy projects firstly bid for the necessary interconnection to the mains and subsequently bid for the supply of power.


Unlike most other Latin American countries, Brazil has not yet implemented significant tax incentives for the development of the renewable energy sector, despite the provisions of the Ten Year Plan. The high costs of initial solar development is still rendering the energy source uncompetitive in Brazil in the absence of appropriate governmental incentives. This may well change.

The Brazilian Development Bank – BNDES – has a number of different financing programmes specifically aimed at renewable energy projects. It is the largest lender in Brazil for renewable energy financing across technologies. In 2014, Bloomberg's New Energy Finances league tables for participants in utility-scale asset finance transactions in clean energy showed Brazil's BNDES as the top lead arranger, with a credit of US$2.7 billion, up from US$1.5 billion in the preceding year. BNDES requires that at least 60 per cent of the equipment is locally produced in order to grant loans, which presents an additional barrier. However, there are signs that this requirement may be relaxed to approximately 20 per cent, which should kick start lending in the solar sector.

The future

There are 108 wind projects currently under construction (which will add a further 2.7GW to the grid in the near future) and 350 projects contracted (expected to add 8.3GW). There are also 46 hydro projects under construction (expected to add 15.7GW) and further 175 contracted hydro projects (expected to add a further 2.2GW).

Due to initial high costs, renewables had been unsuccessfully competing with conventional energy projects for a few years. However, in August this year wind projects accounted for 80 per cent of the capacity in an A-3 tender in which 670MW have been contracted. Furthermore, also in August this year, the government held a solar only auction awarding 30 projects for the total generation of 834MW of power.

The government held a solar and wind energy auction in November this year, which had a total of 1,379 registered projects capable of adding 38,917MW to the grid. The government also announced that due to the success of the previous year solar energy auction, they plan to conduct solar energy auctions annually. In addition, due to the success of the last solar energy auction, the plan is to conduct solar energy auctions annually.


In relation to the Conference of the Parties to the United Nations Framework Convention on Climate Change (COP21), Brazil carried out a series of public consultations with different representatives of the civil society and environmental organisations. Among the government goals are the elimination of deforestation in the Amazon forest, the creation of strategies for a massive reforestation within the country and the establishing of means for monitoring all Brazilian biomass.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Machado Meyer
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Machado Meyer
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions