Brazil has significant potential for renewable energy from solar, wind, hydropower, and biomass. Due to economic growth increasing energy demand, energy security concerns from oil imports, and sustainability goals, Brazil implemented several reforms transitioning to renewable energy. Key reforms included opening the energy market to private investment, long-term contracting requirements, and emissions reduction targets. Notable increases have occurred in hydropower, biofuels like ethanol, and more recently non-hydro renewables and natural gas. Challenges remain around ensuring supply reliability and affordability while further developing renewable potential and reducing deforestation impacts.

1. Riding the Waves of Change - A Closer look at the Brazilian
Energy Transition
Introduction
Overview of Brazil and Energy Sector
Brazil is the biggest country in Latin America and the fifth largest in the world. One of the great
advantages Brazil has for energy potential comes from having several different climate zones.
A dry, sunny climate in the center gives opportunity for the solar sector to be developed, and
windy coasts, especially in the southeast, allow for great wind power potential. The Amazon
River and its tributaries offer an abundant potential for hydropower. Brazil is the largest energy
consumer in South America and its total final energy consumption increased by 3.2 % per year
between 1990 and 2012 thanks to sustained economic growth (World Energy Council 2014).
Total Energy consumption in Brazil in 2015 was 299 Mtoe (million ton of oil equivalent). Which
is 35 % of total energy consumed in South America (Enerdata 2016). With almost 200 million
inhabitants, Brazil still has to deal with real challenges for its energy supply, especially if this
country turned to a sustainable way of producing energy. In this paper we will have a closer
look at the energy transition of Brazil.
Why energy transition was necessary and what was the aim?
There are following reasons why the change in energy policies were essential and its aim:
1. The burning of coal, oil, and gas is causing our global warming. The energy supply
system was not sustainable.
2. In 1978 Brazil imported about 53 million tones oil-equivalent per annum and in 2010
Brazil imported about 30 million tones oil-equivalent per annum of its energy as shown
in fig 1 (BP 2014). Renewables and energy efficiency helped to reduce energy imports
significantly, thereby increasing Brazil’s energy security.
3. Local ownership of renewables provided great economic payback to investing
communities. Energy efficiency and renewables together gave the poor a way to hedge
against fluctuating prices for fossil fuels.
4. According to Brazilian Government two major aims of the Energy transition is to
achieve energy supply security and to decarbonize energy supply by switching to
renewable sources.
Figure 1: Brazil Primary Energy Balance.

2. How was the situation before? How is it now?
Brazil has the most renewable energy sources in the industrialized world with 46.8% of its
primary energy production from renewable resources such as hydropower plants (13.9%),
firewood (10.2%), sugarcane products (18.8%) and others (2.8%). Figure 2 shows the
evolution of primary energy production in Brazil over the past 40 years (BG 2009; BEN 2010).
Figure 2: Brazil Primary Energy Production (BEN 2010)
It is interesting to note the increase in consumption of oil and electricity, with a corresponding
decrease in consumption of wood, after the World War II until the 1970s. With the oil crisis in
the 1970s and 1980s there was a stabilization in the consumption of oil and increased
production of hydropower and ethanol, with the Brazilian alcohol program. At the height of this
program, between 1975 and 1985, there was a decrease in consumption of oil products
including gasoline, which was replaced by alcohol (Teixeira et al. 2011).
The progress in energy production from renewable resources happened mainly in the
sugarcane industry. Brazil’s sugarcane-based ethanol fuel program allowed the country to
become the world's second largest producer of ethanol, and the world's largest exporter.
(Sugar cane organization 2016)
The Brazilian National Alcohol Program (known as Proalcool) (History of ethanol fuel in Brazil,
2011; PróAlcool, 2011) was established on November 14, 1975 as a result of two serious
international crises in the 1970s: in the sugar market and oil market that pushed the average
price of a barrel of oil at U.S. $ 2.91 in September 1973 to $ 12.45 in March 1975. At the time,
Brazil imported about 80 percent of the crude oil consumed in the country. The program was
a success for nearly 15 years. However, by the end of 1980, ethanol production and sales of
cars running on pure ethanol dropped due to several factors (gasoline prices fell sharply,
Brazilian inflation, sugar prices increased sharply, a shortage of ethanol fuel supply, and the
reduction of ethanol subsidies by the government). Confidence in ethanol-powered vehicles
was restored with the introduction in the Brazilian market of flexible-fuel vehicles starting in
March 2003 when Volkswagen launched in the Brazilian market the Gol 1.6 Total Flex, the first
commercial flexible fuel vehicle capable of running on any blend of gasoline and ethanol. By
2010, there were 12 carmakers in Brazil (Chevrolet, Citroën, Fiat, Ford, Honda, Kia Motors,
Mitsubishi, Nissan, Peugeot, Renault, Toyota and Volkswagen) that produced 70 flex fuel
models. In the year 2010, there were more than 2.6 million cars and light commercial of the
flex type produced in Brazil, representing more than 86% of the total manufactured that year
(ANFAVEA, 2010).
The recent situation of electricity generation mix can be seen from figure 4 (Greenpeace 2015).
Decrease in Hydroelectricity is due to severe negative environmental and social impacts, which
includes the recent severe environmental and social disaster by bursting of Bento Rodrigues
dam.

3. Figure 3: Destroyed village (Left photo by El Globo 2015) and Flooded Doce River joining the
sea on the coast of Espirito Santo (Right photo by Ricardo Moraes 2015)
Furthermore, changes in rain patterns associated with climate change pose notable risks to
hydropower, which depends on reservoirs full of water. But there is notable increase in
electricity generation from non-hydro renewable energy. However, significant increase in
natural gas consumption is due to higher demand of electricity in Brazil.
Figure 4: Brazil electricity mix
Process of Energy Transition
Energy Transition through reforms in energy policies
First reform:
The energy market changed radically during the 1990’s to become a free and open market,
attractive to private companies. With a huge increase in energy demand, the Brazilian
government was forced to attract the private sector in order for the electricity sector to have
the investment capital to develop quickly. As an example, Electrobras, which is now the main
power utility company in Brazil, was a national public company and opened its capital to private
stakeholders.
Second reform:
To avoid a new electricity crisis due to a huge rise in electricity prices, the Energy Research
Company was created to help the Energy Ministry in regulating the electricity market. Since
2004 all energy trade must be carried out by long term contracts. Two trade environments
were also created in the wholesale market, such as a regulated, contracting environment
(ACR) where distribution companies buy energy in public auctions and a free contracting
environment (ACL).

4. Third Reform:
In 2009, the government of Brazil approved the National Policy on Climate Change, including
the creation of a voluntary national emissions reduction target of reducing between 36.1% and
38.9% of projected emissions by 2020. Approximately half of these reductions are expected to
come from improved energy efficiency in construction, farming, and industry and by installing
more renewable energy sources.
Who are the main Players?
Following is a list of the main players in the energy policy of Brazil as well as the key programs.
Government players
• Ministry of Mines and Energy:
The ministry proposes and implements the energy (renewable and conventional energy) and
mining laws, according to the government’s strategy.
• IBAMA:
(Brazilian Institute of Environment and Renewable Natural Resources) IBAMA, the
enforcement agency of the Ministry of Mines and Energy, is responsible for the monitoring,
preservation and control of the sustainable use of natural resources in Brazil.
• The Brazilian Electricity Regulatory Agency:
ANEEL, in Portuguese, Agência Nacional de Energia Elétrica, is an autarchy of the
government of Brazil linked to the Ministry of Mines and Energy. Its stated goal is to "provide
favorable conditions for the electricity market to develop in a balanced environment amongst
agents, for the benefit of society."
• The Energy Research Company (EPE):
Created in 2004, the Energy Research Company assists the Ministery of Mines and Energy in
sector planning and especially in expansion auctions.
• Operador Nacional do Sistema Elétrico (ONS):
In order to manage and control the market connections, ONS, an operator system company,
which is in charge of the coordination between power companies and the management of
transmission services, was created in 1998.
• The National Nuclear Energy Commission (CNEN):
Created in 1956, the National Commission, under the Ministry of Science and Technology, is
in charge of the nuclear regulation and aims to implement laws about radiation protection and
safety.
• ANP:
National Agency of Petroleum, Natural Gas and Biofuels, responsible for regulating the oil
sector and linked to the Ministry of Mines and Energy
Private & public players
• Eletrobras:
Provides, with its subsidiaries, approximately 60% of the total power supplied in Brazil. The

5. company manages the generation, transmission and distribution through specialized
subsidiaries.
• Tractebel Energia:
The other big company, Tractebel Energia, is totally private and has an installed capacity of
11GW, mostly generated from hydro power plants.
Programs
• PROCEL
The government of Brazil established a national electricity conservation program known as
PROCEL at the end of 1985. PROCEL, housed at Eletrobras, funds energy efficiency projects
carried out by state and local utilities, state agencies, private companies, universities, and
research institutes. Eletrobras/PROCEL also helps utilities obtain low-interest financing for
major energy efficiency projects from a revolving loan fund within the electric sector.
• PROINFA
Incentives Program in 2002 for Alternative Sources of Electric Energy.
Tools used to control Energy Transition
An approach to change energy policies in Brazil is mostly Top-Down approach. The main
instrument used to control the energy sector is the organization of auctions for new capacities
(World Energy Council 2014). The first auctions held were limited to certain technologies, for
example, the first biomass-only reserve energy auction in 2008 during which the government
auctioned 2,379 MW of power, followed by the first wind auction in 2009 with a total of 1,805
MW. Recently, the government started to open the auctions for other technologies (World
Energy Council 2014).
What were the leverage points?
During energy transition in Brazil the following key leverage points were noticed
1. Economic growth
2. Technology advances on both the supply and demands sides
3. Investment decisions, both in terms of energy sources and profitability
4. Disruptions in supply by various actors (fossil fuel lobbyist)
Discussion, Reflections and Future Prospective
Benefits and Tradeoffs
Energy transition helps Brazil to reduce energy imports and created new jobs in the country
thanks to renewables. Installing more renewable energy resources and controlling the
deforestation is helping Brazil to cut carbon emissions. Besides all the benefits, the renewable
energy is still expensive, which somehow created uncertainty in energy market and hence
confusion in making new climate friendly energy policies. According to OPIC (Overseas Private
Investment Corporation), if Brazil would invest only in natural gas resources more than 5 million
people could have access to cheap energy.
The potential negative impacts of biofuel are on soil, water and biodiversity in the case of large-
scale monoculture plantation. The expansion of sugarcane crops to the areas presently
cultivated for soybeans also represent an environmental threat, because it may increase
deforestation pressure from soybean crops in the Amazon region. Besides negative impacts
on environment there are also social negative impacts such as land grabbing. (Martinell and
Filoso 2008)

6. Challenges and opportunities
In 2013, Brazil was under a real threat of blackouts when the country’s reservoirs dropped to
dangerously low levels after years of drought. As the drought continued in early 2014 and
water was preserved for the FIFA World Cup being held during the summer, energy supply
conditions deteriorated further. As a result, thermal backup capacities were brought on line.
The scarcity of supply combined with the use of more expensive thermal capacities has caused
a strong increase in costs, which were passed on to end consumers.
Given the dry weather and the expected demand growth, Brazil’s main challenge is to ensure
the security of supply by diversifying new capacities while keeping the cost of these structural
changes as low as possible. If Brazil meets these challenges successfully, the large potential
for renewable energies can be utilized in the long term.
Another challenge is the energy establishment’s resistance to new low-carbon solutions. which
is being explained through its core belief that Brazil already has a low-carbon energy sector
where the introduction of new renewables would harm energy security and increase energy
prices. The climate change advocacy coalition has nevertheless been able to enter the energy
subsystem and involve in energy policy debates. The coalition has been somewhat successful
in implementation of hydropower expansion in Brazil.
Future Strategies
The official plan is to continue to expand hydropower capacity to reach 125 GW by 2024,
including small hydropower plants, with other types of renewables growing from 17 to 49 GW.
The ten-year plan for the energy sector published in September 2015 by the Brazilian Ministry
of Mines and Energy would increase PV generation capacity to seven GW by 2024 and this is
an improvement over the previous plan published last year indicating 3.5 gigawatts by 2023.
And 24 GW of wind power capacity by 2023. These are still extremely modest in terms of the
country’s potential, which is huge. For instance, Brazil receives far more solar energy per
square meter than Germany (ecoa 2010), and its wind conditions are among the best in the
world. Still, it would be a great improvement for Brazil to start counting photovoltaics in
gigawatts; the country only has 23 megawatts installed at the end of March 2016 (Kenning
2016).
Final Remarks
Energy planning in Brazil will certainly have a major contribution in reducing GHGs in the short
and long term. An increasing share of biomass in thermo-electric power, advances in
integration of wind and solar energy in the network, greater reliability of ethanol supply and
better and wide public transportation, are all important factors in this effort. However, from the
point of view of Brazilian GHG emissions, reducing deforestation remains a priority for the
country in the short term, given the very high percentage of emissions from the sector of land
use and forests. But from the standpoint of global emissions, the high contribution of renewable
energy sources in Brazil serves as a global model to be followed by countries at the time still
being held hostage to fossil fuels.
Besides the gain in terms of reduction of GHG emissions, renewables have great potential for
providing other benefits to Brazilians such as energy security, facilitating physical and
economic access to modern energy services, employment and socio-economic development
and reduce local environmental impacts. These external benefits are rarely considered in
decision making and, if internalized, can help ensure the sustainable penetration of
renewables.
Nevertheless, in Brazil renewable-energy-system-based model needs to be expanded in both
qualitative besides quantitative ways, so as to ensure a transition to a more relevant target,
which is a sustainable energy system.

7. References:
BEN 2010, “Balanço Energético Nacional 2010. Relatório Final”. Available from:
<https://ben.epe.gov.br/downloads/Relatorio_Final_BEN_2010.pdf> [17 August 2016]
World Energy Council 2014, “Global Energy Transitions A comparative analysis of key
countries and implications for the international energy debate”. Available from
<www.weltenergierat.de> [16 August 2016]
BP 2014, “Statistical review of world energy 2014”. Available from <http://euanmearns
.com/brazil-samba-energy/> [ 18 August 2016]
Enerdata 2016, “Global Energy Statistical Yearbook”. Available from: <https://yearbook.
enerdata.net/> [16 August 2016]
Brazilian Government 2009, “Sustainable Development Everyone’s Commitment and
Responsibility December”. Available from: <http://www.cop15brazil.gov.br/pt-BR/?page
=panorama/matriz-energetica-limpa>[22 August 2016]
Silvio Rainho Teixeira, Agda Eunice de Souza, Angel Fidel Vilche Peña, Regiane Godoy de
Lima and Álvaro Gil Miguel 2011, "Alternative Fuel", Chapter 8, Use of Charcoal and Partially
Pirolysed Biomaterial in Fly Ash to Produce Briquettes: Sugarcane Bagasse”. Brazil
Ricardo Moraes 2015, “Red Sludge from Brazilian Dam Collapse Reaches the Atlantic”.
Available from <http://www.theatlantic.com/photo/2015/11/red-sludge-from-brazilian-dam-
collapse-reac hes-the-atlantic/417519/> [19 August 2016]
El Globo 2015, Catastrophic dam collapse and toxic mud flow destroy Bento Rodrigues in
Brazil. Available from < http://strangesounds.org/2015/11/catastrophic-dam-collapse-and-
toxic-mud-flow-destroy-bento-rodrigues-in-brazil.html> [19 August 2016]
Greenpeace 2015, “Laggards and leaders: the energy transition in BRICS countries”. [16
August 2016]
Ecoa 2010, “Global solar radiation annual of Brazil”. Available from <http://
riosvivos.org.br/a/Noticia/Global+solar+radiation+anual+of+Brazil/15588 > [22 August 2016]
Tom Kenning 9 May 2016, “Brazil installed just 8MW of solar in year up to March”. Available
from <http://www.pv-tech.org/news/brazil-installed-just-8mw-of-solar-in-year-up-to-march>
[22 August 2016]
Sugar cane organization 2016 “Spreading the word about clean solution from sugar cane”.
Available from <http://sugarcane.org/sugarcane-products/ethanol> [30 August 2016]
Luiz A. Martinell and Solange Filoso 2008 “Expansion of sugar cane Ethanol production in
Brazil: Environmental and Social Challenges” Available from <
https://www.tamu.edu/faculty/tpd8/BICH407/Brazilenvsoc2.pdf> [30 August 2016]