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A report by the International Energy Agency (IEA) on global electricity demand predicts a 3.5% growth in electricity consumption in Brazil between 2024 and 2027. The study links blackouts in the country to a global challenge with transmission and distribution networks and warns of the growing risks of climatic phenomena such as droughts. Electricity demand in Brazil is expected to grow by 6% in 2024 amid robust economic growth and high summer temperatures. A new report from the International Energy Agency (IEA) predicts that electricity demand will grow by around 3.7% annually between 2025 and 2027. The projection considers that the Light for All program, which aims to combat energy poverty in rural areas and the Legal Amazon by facilitating access to electricity, should support the increase in residential consumption, with the aim of serving the 318,000 families that still lack electricity in the coming years. On the supply side, from 2024 onwards, the Brazilian electricity market is characterized by substantial growth rates of renewables, particularly solar and wind, while fossil fuel sources continue their steady decline. Wind power generation grew by 13% in 2024, and is projected to increase at an average rate of around 8% per year until 2027. Solar PV grew the most of all sources, by 46% in 2024, and is projected to grow by an average annual rate of 22% from 2025 to 2027. Despite a decline of 2.8% in 2024, hydropower generation remains the largest source of energy. In 2025, the IEA expects hydropower to return to 2022 levels, although a slight increase is forecast for the remainder of the forecast period. These trends underscore Brazils accelerated shift to renewable energy sources, whose share of total electricity generated will, depending on hydrological conditions, be around 90% in 2027, compared to 88% in 2024 and 78% in 2017. As a result, emissions intensity will decline by an average of 13% per year over the 2025-2027 period. Local challenges are also global: power outages and historic drought The rapid growth of variable renewable generation has led to frequent generation outages in Brazil, and to address the issue, the country has held two transmission auctions (001/2024 and 002/2024) with three lots totaling 7,250 km of transmission lines, 19,200 megavolt-amperes (MVA) of transformation capacity for substations, and investments worth US$4 billion. In addition, the improvement of the rules governing the prioritization of generation outages by the system operator is being discussed in Public Consultation 45/2019, in order to mitigate the technical and economic impacts on electricity generators and consumers. The IEA report also highlights that in 2024, major blackouts occurred in regions around the world due to weather, fuel and grid issues, such as in the US, Ecuador and Australia. Large-scale power outages affected a wide range of countries and regions, highlighting the need to increase resilience to the growing impact of climate on energy systems. In Brazil, São Paulo suffered a blackout on October 11 last year, with some 2.6 million customers left without electricity due to a storm that lasted 30 minutes. The storm damaged 17 power lines and 11 substations. In addition, extreme weather is expected to remain a key driver of adequacy risks in many regions of the world. Recent resource adequacy assessments looking at the coming winter and the following three to four years show tight adequacy conditions in several regions. In the near term, similar to recent events, these risks are primarily related to increased demand due to cold or heat waves, which may coincide with resource disruptions, low renewable generation and fuel supply availability issues. These factors are also combined with potential impacts from generator retirements in some countries. Brazil faced its worst drought ever in 2024, and while it was severe by historical standards, it was not as strong in the most important hydrological basins of the National Interconnected System (SIN). As hydroelectric reservoirs reached low levels, the country turned to thermoelectric plants, prompting Aneel to activate the additional tariff (red flag tariff, level 1), resulting in a charge of $0.75 per 100 kWh. Brazils most recent resource sufficiency study, within the Ten-Year Energy Expansion Plan, published by the Energy Research Company (EPE) and the Ministry of Mines and Energy (MME), identified the need for additional capacity through 2027. Energy and power needs show a marked seasonality, with a peak in the dry season and a steady growth throughout the decade. The study indicates a high risk of electricity deficit of 5.5 GW by the third quarter of 2028, with a deficit of 1.5 GW appearing as early as September 2027, at the end of the dry season, in a scenario of severe drought and particularly low hydroelectric production. In terms of energy needs, additional capacity will be required until the end of 2028, highlighting the need for expansion efforts to ensure adequacy. |
