Distributed energy resources market in Brazil

Brazil's reliance on hydropower makes the country highly susceptible to droughts. Deforestation and climate change are also affecting water availability, further stressing hydropower resources. In fact, a severe drought in 2021 caused energy shortages and an increased reliance on more expensive and polluting thermoelectric plants.  

In such context, Brazil has promoted the use of distributed energized resources (DER) to create a more balanced, resilient, and sustainable energy system. This aims to make the country less dependent on hydropower and enhance overall energy security. A diversified energy mix with a significant share of DER is expected to prevent power shortages and reduce the need for thermoelectric plants.   

Key opportunities for Canadian DER companies in Brazil

If your company sells one of the following solutions, you could have the opportunity to partner with Brazilian businesses on innovation projects and sell to local buyers.  

  • Energy storage: Brazil´s first battery energy storage system (BESS) auction is scheduled for June 2025. This aims to secure approximately 3 gigawatt hours (GWh) of storage capacity, presenting a significant opportunity for companies specializing in energy storage technologies.  
  • Microgrid:  There is a growing demand for microgrids in remote areas, such as the Amazon region. Programs like ‘Mais Luz para a Amazônia’ fund projects that bring sustainable and reliable electricity to isolated communities. This provides opportunities to companies with expertise in microgrid technology and renewable energy solutions. 
  • Distributed generation: Net metering and tax incentives have encouraged consumers to generate their own electricity, crediting them for excess energy fed back into the grid. Canadian companies can benefit from these incentives to reduce costs and make projects more feasible. 
  • Electric vehicles (EVs):  The Brazilian Mover program supports investment in low-emission vehicles, including EVs and hybrids. This benefits companies specializing in green mobility technologies, such as:
    •  EVs 
    • battery storage 
    • charging systems 

Industry highlights – Local power sector

99% of the population has access to electricity 

85% of the electricity mix is from renewable energy 

88 million electricity meters  

14% of the total installed capacity is from distributed generation 

1.6 million jobs in Brazil’s renewable energy industry 

22% of the electricity mix is from solar photovoltaic - 67% of which is from distributed generation 

4.9 million consumers getting net metering credits 

170,000 km of high-voltage transmission lines 

Notable challenges for Canadian DER companies in Brazil

  • Brazil's regulatory framework for DERs can be complex and varies by region. Navigating these regulations and getting necessary permits can be time-consuming and costly. 
  • The DER market is competitive. Companies need to differentiate themselves through innovation and efficiency to succeed. 
  • Brazil's tax system is complicated. There are multiple taxes at the federal, state, and local level that can significantly increase the cost of doing business. Although tax reforms are underway, the current system remains a major hurdle. 

Brazil business landscape

  • Brazil is investing heavily in expanding its power infrastructure. Investment is estimated to surpass $100 billion by 2029, attracting domestic and foreign players like: 
  • Establishing strong local partnerships is crucial for navigating the Brazilian market. Local partners can help with: 
    • regulatory compliance 
    • logistics 
    • understanding the local business culture 
  • Over the past few decades, Brazil has undergone significant market and regulatory reforms to transition towards a more market-driven electricity system. These reforms have helped in expanding and diversifying the electricity mix. This will help make the sector more resilient and sustainable. 

Upcoming projects and events

Summary

Brazil is the largest electricity market in Latin America and the seventh largest in the world.  Brazil has solid plans to expand its DER, creating solid business opportunities for Canadian companies. 

For more information on DER opportunities in the Brazilian market, please contact Laura Netto, Trade Commissioner responsible for the energy sector at the Consulate General of Canada in Rio de Janeiro – laura.netto@international.gc.ca.

Additional Information

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