Driven by growth in free market demand, Brazil’s electricity market is expected to add 115GW of new capacity by 2034. Wind and solar will lead the growth, adding 84GW over the next decade, including 61GW of concentrated and distributed solar PV projects, and 24GW of onshore wind projects, according to new analysis from Wood Mackenzie.

Brazil's electricity demand market changes

Wood Mackenzie's report points out that free market demand is expected to grow by more than 100% in the next decade. The opening of the market has led to competition between centralized and distributed power generation. The new compensation regulations of Law No. 14,300 have triggered a wave of distributed power generation, but from 2028, the free market will be fully opened to household off-takers, which will slow the growth of distributed power generation.

Marina Azevedo, senior power analyst at Wood Mackenzie, said: "As long as the market is not fully opened to household consumers, solar distributed power generation will remain an increasingly profitable business model affected by high electricity prices. "But in the long run, concentrated solar power generation has room for expansion, driven by new demands such as battery growth and green hydrogen. ”

Looking ahead, hydropower will continue to influence Brazil’s power system, while wind and solar are expected to account for 71% of new power additions by 2050. Notably, solar distributed generation will stand out with a 10% compound annual growth rate over the next decade.

Azevedo added: The increase in variable renewable energy will pose major challenges to operators. The power system will need faster dispatch technologies that can be quickly put into use when needed to provide additional load based on demand. One of the main impacts is increased price volatility. From 2030 onwards, 20% of the time, the price of electricity per kilowatt-hour exceeds $100.

Source：https://mp.weixin.qq.com/s/c8HmDs0vgFFDjbK_T3p9oA