Brazil, which is the fifth-largest country in the world and the largest in Latin America, is actively working towards its energy transition goals. It recently signed a work plan for the same with the International Energy Agency (IEA). The plan will guide cooperation and bilateral activities between the IEA and Brazil during 2024-2025, strengthening support for the Brazilian presidency of the 30th Conference of Parties (COP30) of the United Nations Framework Convention on Climate Change (UNFCCC) in 2025. Priority areas of this plan are cooperation in fair and inclusive energy transition, as well as for various activities such as virtual and in-person workshops, technical dialogues, consultations, reports, training and capacity building sessions, among others. In the electricity sector, the country is actively working towards limiting its dependency on hydropower projects to reduce its vulnerability to extreme weather conditions.
Currently, hydropower accounts for up to 50 per cent of Brazil’s energy mix and has in the past faced challenges during severe droughts. This vulnerability underscores the need for diversification and resilience in the energy portfolio to ensure a stable and secure power supply. Geographical challenges also persist, given the vast distances between energy generation hubs and demand centres. Most of Brazil’s hydropower capacity is located north in the Amazon River Basin, but the load centres are mainly along the eastern coast, particularly in the south. National electricity reliability is challenged because of the long distances between generation and load centres, recurring drought conditions and deforestation.
The country has now planned significant renewable energy sources (RES) capacity in the north and northeast regions to ensure energy security during extreme weather conditions and connect these regions to load areas of southeast/centre-west regions. Brazil’s energy agency Empresa de Pesquisa Energética (EPE) is actively working towards this and in January 2023 published a study recommending a high voltage direct current (HVDC) project to connect future generation projects and expand the exchange capacity between the north/northeast and southeast/centre-west regions. The majority of the segments of the project were auctioned during transmission auction No. 02/2023 under three lots. The remaining components are planned for upcoming auctions.
In addition, the country is focusing on establishing inter- and intra-region connections, especially for isolated regions of Brazil. In August 2023, it launched the BRL5 billion ‘Energias da Amazônia’ programme for the transition of the 211 isolated systems in Amazonas that use fossil fuels to generate electricity towards cleaner fuels. According to the Ministério de Minas e Energia (MME) or Ministry of Mines and Energy, the key objectives of the programme are to ensure the quality and security of electricity supply for the population of the region; reduce both generation from diesel oil and CO2 emissions; and reduce electricity costs and expenses from the Conta Consumo de Combustíveis (CCC) or Fuel Consumption Account. In addition, MME has relaunched the Luz para Todos programme, which aims to guarantee electricity supply to remote and rural areas, especially in the northern and Amazonas regions.
To support this grid expansion plan, EPE has announced a draft Plano Decenal de Expansão de Energia 2032 or Ten-Year Development Plan 2032 with an investment of BRL158 billion for the expansion of the transmission network during 2024-33. Of this, BRL110 billion, or 70 per cent, will be invested in line projects and the remaining 30 per cent or BRL48 billion in substation projects.
Existing infrastructure
Brazil has a generation capacity of over 222 GW, of which the majority or 49 per cent (110 GW) comes from hydropower, 29 per cent (63.5 GW) comes from RES such as wind and solar, and 21 per cent (46.7 GW) comes from thermal capacity. The country also has 1,990 MW of nuclear capacity, which comprises about 1 per cent of the total generation mix.
Figure 1: Installed generation capacity by fuel as of November 2023 (%)
The backbone of Brazil’s energy transmission is the Sistema Interligado Nacional (SIN), or National Interconnected System, encompassing four regional subsystems: South, Southeast−Midwest, North and Northeast. Covering 98 per cent of the country’s electricity market, SIN plays a crucial role in ensuring a cohesive and well-connected energy landscape. However, isolated systems in regions such as Amazonas, Roraima, Acre, Amapá, Rondônia and part of Pará cater to the remaining 2 per cent. Furthermore, Brazil’s energy reach extends beyond its borders, with grid connections to neighbouring countries such as Uruguay, Argentina, Venezuela and Paraguay.
As of November 2023, Brazil’s transmission network consisted of approximately 184,019 km of transmission lines operating at voltage levels of 230 kV AC, 345 kV AC, 440 kV AC, 500 kV AC, ±600 kV DC, 750 kV and ±800 kV DC. Of the installed line length, 38 per cent was at 500 kV AC, followed by 38 per cent at 230 kV.
Figure 2: Transmission line length by voltage as of November 2023 (%)
During the 2018–2023 period, the transmission line network increased at a compound annual growth rate (CAGR) of 4.8 per cent. The transformer capacity demonstrated a CAGR of 4.4 per cent during the same period.
Figure 3: Growth in Brazil’s transmission network, 2018-22
In recent years, there has been a notable increase in private investment in Brazil’s electricity transmission sector. On June 14, 2022, the country’s largest transmission system operator (TSO), Eletrobrás, was privatised and its shares were officially listed for trading on the stock exchange. The government has retained only a minority stake of 36.99 per cent in the company. As a result, the country’s transmission network is now open for participation by private entities. Other prominent private transmission concessionaires in the sector include Companhia de Transmissão de Energia Elétrica Paulista (CTEEP), Transmissora Aliança de Energia Elétrica SA (TAESA) and State Grid Brazil Holding S.A. (SGBH).
Future plans
Under Plano Decenal de Expansão de Energia (PDE) 2032 or Decennial Energy Expansion Plan 2032, the country’s electricity consumption is likely to increase at a CAGR of 3.4 per cent during 2024-32, reaching 816 TWh by 2032. To meet this demand, MME plans to add more than 28.6 GW of generation capacity during the period. The key contributors will be distributed generation (61%), wind (32%) and biomass (5%), while the rest will be hydropower based. The country also plans to retire more than 7.1 GW of its thermal capacity during the next 10 years, following its commitment to promoting clean projects. With this, the net generation capacity addition will be around 21.5 GW during the next 10 years.
Figure 4: Expected net addition to generation capacity (MW)
The country is also structuring its transmission network. Along with supporting the upcoming clean energy capacity, the emphasis is on upgrading the ageing network. As per the draft PDE 2032, around 41,460 km of transmission network and about 120 GVA of transformer capacity will be constructed in the next decade. The majority of the upcoming transmission network has been planned at the 500 kV level, with 68 per cent of the planned lines and 53 per cent of the transformer capacity coming at this level.
Figure 5: Planned line length addition under PDE 2032 (km)
One of the key projects proposed is the 800 kV, 1,440-km Graça Aranha–Silvânia HVDC double-circuit line and the associated network, which includes nine 500 kV alternating current (AC) lines, a 500/800 kV converter substation, a 500 kV conventional substation, and two-line sections (one in single-circuit and one in double-circuit). The entire network is scheduled to come online by 2028, mainly to connect north/northeastern regions. The majority of the project’s components were auctioned during transmission auction no. 02/2023.
Under the draft PDE 2032, an investment of BRL158 billion has been envisaged in the power transmission segment during 2024-33, with BRL110 billion in lines and BRL48 billion in substations, including border facilities.
Figure 6: Planned investment in transmission network by category, 2024–33, (%)
PDE includes all the upcoming projects for next 10 years, including both tendered and to-be tendered projects. For projects planned for upcoming auctions, EPE also publishes Programa de Expansão da Transmissão (PET) and Plano de Expansão de Longo Prazo (PELP) semi-annually to provide additional details on upcoming projects. Recently, EPE published PET/PELP for the second semester of 2023. PET only covers works with a need date within six years of the current year, in this case until 2029. These works represent the determining works of sectoral planning. PELP comprises works with a date of systemic need from the seventh year onwards, which is 2030. These works are indicative in nature and may be re-evaluated in the next planning cycles.
The recent PET/PELP includes projects with a total line length of 14,600 km and a substation capacity of 75,900 MVA for the 2027-38 period. The document anticipates an investment of BRL56.2 billion in Brazil’s energy expansion with 67 per cent (BRL37.8 billion) planned to be invested in transmission lines and 33 per cent (BRL36.9 billion) in substations. These projects are scheduled to be offered during two transmission auctions planned for 2024.
Amazonas Energies programme
Under this programme, MME has also signed a work order for the Linhão de Tucuruí project or Engenheiro Lechuga–Equador–Boa Vista transmission line project, which aims to establish a connection between Roraima and SIN. An investment of BRL2.6 billion has been earmarked for the same.
The project aims to connect the state of Roraima with the country’s national grid. At present, Roraima is the only Brazilian state, among the 27 federal units, that remains isolated. Residents of Boa Vista, the capital, and nearby areas are reliant on thermoelectric plants fuelled by diesel oil, natural gas, biomass and a small hydroelectric plant. The transmission line that will be extended to Boa Vista will expand the system traversing a substantial part of Pará and Amazonas. This measure is an important component of the Energias da Amazônia programme, designed to promote the energy transition and decarbonise the Amazon biome.
The project was awarded as Lot A during auction 004/2011 of Brazil’s national electricity agency, Agência Nacional de Energia Elétrica (ANEEL), to Transnorte Energia S.A. (TNE), a subsidiary of Centrais Elétricas do Norte do Brasil S.A. (Eletronorte) (49 per cent) and Alupar Investimento S.A. (51 per cent). However, the project has not yet been completed due to ongoing environmental and social issues, which have hindered its development. Now, with the strong support of the federal government, the project is under construction and is expected to be completed in the next three years.
It entails the construction of the 400-km Engenheiro Lechuga–Equador line; the 315-km Equador–Boa Vista line; the 500 kV Equador switching substation; and the 800 MVA, 500/230 kV Bora Vista substation. About 125 km of the line will pass through the Waimiri-Atroari indigenous reserve in the states of Amazonas and Roraima. The proposed interconnection will significantly reduce the amount of thermal energy generated in the state, leading to decreased electricity supply costs. As the project advances, operational planning studies will be updated to ensure demand-supply equilibrium. According to estimates from the Operador Nacional do Sistema Elétrico (ONS) or National Electric System Operator, the local thermoelectric plants are projected to see a yearly reduction of around BRL200 million in variable operating costs.
Conclusion
Brazil’s electricity outlook seems positive, with the government actively working to maintain grid stability. The country has opened the transmission sector for private participation and is actively providing regulatory and policy support for the same.
Table 1: Key upcoming transmission projects in Brazil
