The Main Milestones in Brazil’s Energy Transition in 2023

published on 25 June 2024

Fueled by mounting concerns over climate change, the world is striving for a global energy transition, pivoting away from fossil fuels toward renewable energy sources. Brazil, in this context, emerges as a significant player on the global stage.

The energy transition in Brazil has witnessed substantial advancements, propelled by its abundant natural resources, policy initiatives, and technological breakthroughs. By 2023, the country's energy sector had achieved notable milestones, spurred by substantial investments in renewable fuel and energy production, driven by the imperative to decarbonize Brazil's energy matrix.

In this article, we aim to outline some of the key milestones reached in Brazil's journey towards energy transition.

Brazil in the world's top 10 for solar generation

In 2023, Brazil achieved a significant milestone by breaking into the world's top 10 solar energy-producing nations, securing the 8th position for the first time. This pivotal year marked a turning point for solar energy production in Brazil. Beginning the year with approximately 25.4 GW of solar energy capacity, the country ended with a remarkable addition of 10.6 GW. Consequently, photovoltaic solar energy surpassed wind energy to become the second most prominent energy source in Brazil, second only to hydroelectric plants.

The combined output of small and large-scale solar energy marked the most substantial growth in Brazil's energy landscape in 2023. This trend is expected to persist into 2024, positioning solar energy as a primary driver of Brazil's energy transition.

Expansion in the volume of energy offered, with emphasis on renewables

In 2023, Brazil significantly augmented its installed electrical energy capacity by 8.4 GW, a sufficient amount to power over 4 million homes. Notably, wind and solar plants spearheaded this expansion, constituting 90.4 percent of the growth, solidifying Brazil's prominence in the global energy transition.

The country's total installed capacity now stands at 196.6 GW, with renewable sources such as hydro, wind, photovoltaic, and biomass contributing 83.6 percent of this total capacity.

Green Hydrogen regulatory framework

In December 2023, the Special Commission for Public Policy Debate on Green Hydrogen approved a bill (PL 5.816/2023), establishing a legal framework for the sector. The enactment of the Low Carbon Hydrogen Development Program (PHBC) sets the stage for a regulatory environment conducive to advancing the energy transition.

Projections suggest that by 2050, hydrogen's share in the global energy mix could rise from 2 percent to 5 percent in a conservative scenario, or up to 22 percent in an optimistic scenario. Hence, market regulation plays a crucial role in steering this transition.

The state of Piauí, located in the Northeast region, has already secured two significant Green Hydrogen production projects from European companies Solatio and Green Energy Park. Anticipated investments totaling R$200 billion over the next decade are expected to create 20,000 jobs and generate more than 20 GW of power.

Biofuels gained strength in agribusiness

The increased investment in the development of new fuels in 2023 bolstered the prominence of biogas and biomethane, particularly within the agribusiness sector. This trend is anticipated to persist in the years ahead, with growing momentum as a key strategy for decarbonizing the energy matrix within this sector.

And what about 2024?

All the strides made in 2023 are laying the groundwork for COP30, slated to be held in Brazil for the first time in 2025, specifically in the city of Manaus. Leading up to this pivotal event, Brazil continues its trajectory into 2024, propelled by substantial transformations fueled by ongoing investments in renewable energy, regulatory reforms, and technological innovations.

Significantly, forecasts indicate that in 2024, fresh investments spurred by the photovoltaic sector could surpass R$38.9 billion. This includes investments in large-scale solar plants as well as small and medium systems installed on rooftops and lands.