Regional Market Outlook on Electricity Market

  • The capacity of electricity generation is expected to grow at a CAGR of 3.06 percent in the next three years, with highest growth in the renewable energy sector
  • Hydro generation capacity has growth at 1.4 percent CAGR, with an expected rise in installed capacity of about 4,139 MW by December 2017

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  • Thermal power growth is expected to have 3.2 percent CAGR in the next three years, especially in natural gas-powered plants with low fossil fuel prices adding to the cost attractiveness of thermal power plants. Mauá 3 Thermal Power Plant 590 MW under construction in the city of Manaus adds to thermal installed capacity on 2017

  • Nuclear and biomass power is growing at 4.26 and 4.1 percent CAGR, respectively, as a part of Brazil’s aim to have a higher share of renewable power connected to national grid. Enel Green Power has added four PV projects for a total capacity of 807 MW by 2018

  • Wind is expected to grow at 31 percent CAGR in the next three years and accounted for 27 percent of the total installed capacity as of December 2017. Enel has started operating its 172 MW Morro do Chapéu Sul wind facility, which is located at Brazil’s North -eastern state of Bahia 

Industry Structure and Outlook 

  • The overall share of hydro energy in fuel mix is expected to decline by 4 – 5 percent by 2019, as Brazil is aiming to balance the lopsided fuel mix of the country
  • The thermal power capacity expansion is expected to evolve mainly from natural gas fuelled power plants; however, due to faster growth of renewables, the overall thermal power share is expected to remain the same
  • Nuclear expansion occurs via Angra 3, and its operation is expected to start in January 2019 and will represent an expansion of 70 percent of the current nuclear power capacity
  • Renewable energy share is expected to increase at an average growth rate of 5 – 6 percent annually, especially because of the strong expansion of wind and biomass power capacity

Capacity Addition and Utilization Outlook 

  • Hydro generation capacity of 12.7 GW is expected to be added by 2024 as the government is aiming to reduce its dependency on hydro power share
  • Thermal power growth capacity of 6.5 GW is expected to be added by 2024, especially in the natural gas powered plants
  • Wind power growth capacity of 17.3 GW is expected to be added by 2024 because of high wind power potential in Brazil coupled with the government’s commitment to increase renewable share in the fuel mix
  • The Brazilian Association of Photovoltaic Solar Energy (Absolar) projects that the country will end 2018 with 2.5 GW of installed solar power generating capacity, a 115 percent surge from the 1.15 GW in end-2017. Enel adds 1.13 GW of renewable capacity where new capacity comes from solar in North America and onshore wind in Iberia and South America
  • Enel Green Power has added four PV projects for a total capacity of 807 MW by 2018 will also contribute in lowering the price

 Electricity Suppliers Market Landscape

  • In all, 75 electricity generating companies are operating in the Brazilian electricity market as of 2016
  • Large government-controlled companies dominate the sector with four public companies Eletrobras, Cemig, CESP and Copel, having 47.3 percent share
  • Private sector has increased rapidly in the last 5 years with a total share of 52.7 percent, and Engie Brasil being the largest private player with a share 5.4 percent