Brazil, one of the world’s fastest growing economies and the largest power market in South America is moving towards the sustainable development of power sector in future. In the light of its growing power demands, the markets for other sources like natural gas, wind, solar energy are going to expand in addition to the growth of hydro energy, on which most of Brazil’s power depends. Over the coming few years there will be an increase in the inflow of cash for building new transmission and distribution lines and revamping the old ones, presenting a wide variety of opportunities for financial and technical service providers. The Brazilian power segment was privatized in 1997 but even after 15 years the government has an upper hand, which along with many other factors, makes the investors wary.
The whole power scenario of Brazil has come a long way from being a state controlled underinvested sector to a competitive privatized market. The sector which used to be dominated by government policies and regulations, like in any other developing country, has now become an exciting and dynamic open market. The power generation in Brazil is dominated by hydro power which account for more than 70% of the overall installed capacity in recent years. The total installed capacity was around 116 GW by end of 2011, the largest in Latin America and third largest in America region after U.S and Canada.
The future of Brazil’s power sector will be focused on generation of power from sources other than hydro. By 2020 the consumption is forecasted to grow by more than 500 TWh and it will require sources like wind, solar, biomass to contribute to the supply. Thus, coming years will see heavy investment, change in government’s policies in favor of these sources and auctions that will be dominated by wind and solar. Apart from developing different sources of power generation there are some issues that need to be tackled by the government which will ensure adequate and fair supply of power to all.