Brazil Shrinks Hydropower Portfolio

Brazil Shrinks Hydropower Portfolio in Favor of Solar

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To achieve this objective, the company plans to invest BRL 6 billion ($1.2 billion) in Brazil by 2025, with the final goal of achieving solar generation for 50% of the country's total energy supply.

According to BNamericas, the company now derives 85% of its electricity from hydroelectricity; however, it plans to cut this figure in half and have the remaining 50% of its electricity come from solar. By the year 2025, the target is to have one gigawatt of solar capacity already deployed (today, this number is close to 0.1GW). As a point of comparison, Brazil's installed solar capacity was 9 GW in the year 2021.

Brazil Shrinks Hydropower Portfolio

"We do not plan to participate in any and all business verticals." The CEO has identified the dedicated distributed generating model and shared remote plants as the two different verticals that are available.

In the model of distributed generation, a tiny plant is built on demand in order to provide service to a single customer. Customers who fall into this category can be found working with the company in the telecommunications and banking sectors, respectively. Shared remote plants are dedicated to small businesses such as pharmacies, restaurants, and stores that do not have sufficient demand to require a whole plant. Examples of these enterprises include: According to the information provided by the corporation, there is the potential to serve around one hundred consumers of this size for every megawatt of electricity produced. Each plant that EDP seeks to acquire has between 3 MW and 4 MW of capacity, which results in a total of 300 customers per unit on average.

The corporation has stated that it is interested in purchasing property in the northeast and southeast in order to make distributed-generating investments.

EDP intends to engage in a few divestments in order to concentrate its financial resources on the photovoltaic energy sector. One of them is hydroelectric generation, which is possible mainly because of the high amount of precipitation that the country receives. According to the CEO, the transaction for the sale of the 198MW Mascarenhas plant in Espirito Santo should be finalised before the end of the year. The sale was reported by the firm during the third quarter.

The CEO stated in a conference call with analysts that the other two hydroelectric facilities (Santo Antônio do Jari and Cachoeira Caldeiro) are not for sale at this time since they have not reached a value that would please both parties.

Brazil Shrinks Hydropower Portfolio

EDP likewise has the intention of discontinuing its investment in thermoelectric generation. In Porto Pecanha, the company operates a coal-fired power plant; however, by 2025, it is expected that it will no longer be the plant's primary shareholder.

When it comes to making financial investments in transmission and distribution, the corporation first ventured into this market just two years ago. The business has announced that it will participate in the upcoming auctions. In the previous year, it was successful in acquiring the construction lot in Acre as well as the CELG-T privatisation in Goiás. In addition to the sale that will take place in December, the corporation is considering participating in the auction that will take place in June 2023.

Distribution is another area in which EDP Brazil plans to invest some of the BRL 6 billion that has been allocated for the next five years.

As a result of all of the expenditures that have been made, the company anticipates that its EBITDA will expand by 10% to 15% yearly until the year 2025. In addition to the effects of inflation, this is stated in actual terms. The EBITDA of EDP has increased by a whopping 88 percent during the past two years.


In spite of the significant progress that has been made, the government is still confronted with obstacles in its efforts to expand the proportion of non-hydro renewables in the overall energy grid. An event on the transition to clean energy was hosted in May by the Inter-American Development Bank in Brazil, with the support of the IDB Energy Sector. This event was held at the Brazilian National Development Bank (BNDES), and it was held in partnership with the Brazilian Center for International Affairs (CEBRI). Participants discussed the current arguments about how swiftly to drive the transition to clean energy in light of the fact that renewable energy and battery storage are becoming increasingly competitive in comparison to fossil fuels.

Brazil Shrinks Hydropower Portfolio


Why does Brazil have such a plentiful supply of hydroelectric power?

The terrain of Brazil is just right for the generation of hydroelectric power. Brazil's potential for success in the hydroelectric industry is bolstered by the country's varied topography, abundance of rivers, and rainfall. Because of the numerous major rivers and elevation fluctuations, it is possible to control the flow of water by constructing dams and making use of gravity.

Is there hydroelectric electricity available in Brazil?

Since the 1970s, Brazil has placed a significant emphasis on the energy sector of its economy, and hydroelectric facilities have emerged as the optimal option for the nation's need to generate electricity.

Is Brazil a front-runner in the use of renewable energy sources?

About 45% of Brazil's total energy demand is met by renewable sources currently. The profile of Brazil's energy sector is one of the least carbon-intensive in the world. Sugarcane is the primary source of renewable energy production in Brazil. The majority of Brazil's electricity comes from hydroelectric plants (65%).

Does Brazil use solar energy?

The total amount of solar capacity deployed in Brazil had topped 15 GW as of April 2022, with more than 5 GW of that capacity added in 2021 alone. Large-scale solar photovoltaic power plants account for 5 GW of installed capacity, whereas distributed generating systems are responsible for 10 GW of capacity.

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