Brazil doubles 10-year solar forecast to 7GW by 2024

Brazil’s energy planners have doubled their 10-year forecast for solar installations in the country, and now expect 6.9GW to be in place by the end of 2024.

“We wanted to give a signal to solar,” José Carlos Miranda Farias, director of studies and planning at Brazil's energy planning authority EPE told Recharge after the dramatic increase to its previous outlook, which expected 3.5GW in 2023.

The forecast is part of the annual update to the country's 10-year energy expansion plan known as the PDE, the draft version of which will be published for public consultation in the next few weeks.

In the latest update EPE expects annual power consumption growth of 3%, which will require Brazil to have 207GW of total capacity installed by the end of 2024, up from the 195GW previously projected for the end of 2023.

While the solar capacity projection was almost doubled in nominal terms and percentage-wise (3.3% of the total), the forecast for wind capacity was little changed, rising to 24GW or 11.6%, from 22GW or 11.4% in the current 2014-2023 plan.

Brazil currently has 15MW of solar PV installed – less than 1% of a total capacity of 137GW.

Farias' optimism comes from recent interest by investors in solar power in Brazil after 890MW was contracted at last year's auction and 12.5GW of projects were registered for this year's first of two auctions to include the technology.

But Farias stressed that the construction of solar power plants does not depend on the government.

“The plan is indicative, since the decision to which power plants will be built depends on market agents,” he said during the All About Energy event in Brazil's northeastern state of Ceará.

Despite the projected boom in solar power, Brazil will still rely on hydropower and thermal generators for its baseline supply for the time being. While the former is projected to reach 117GW (from a current 90GW), the latter should reach 30GW from today's 20GW, he said. In 2024, that will respectively be 56.7% and 14.3% of total capacity.

Biomass power generation will reach 18GW (8.7%), small hydro will rise to 8GW (3.8%) and nuclear is forecast to rise to 3GW (1.7%), the revised 10-year plan showed. The proportional amounts for these technologies are little changed from the previous plan.

Farias said that looking beyond the next decade, thermoelectric generation will lose ground as current concession contracts for expensive fossil fuel plants are unlikely to be renewed.

They should be replaced by cheaper renewable power or less polluting thermal plants, specifically natural gas-fired units which will have good supply of the fuel from the Pre-Salt oil reservoirs in Brazil's offshore region.

“It's not reasonable to think that we will continue to rely on power that costs R$800/MWh ($258) when now we have solar power at R$220/MWh and wind cheaper than that,” he said.

Farias reaffirmed that the government's plans contain projections for the expansion of the transmission grid ahead of the construction of wind farms or solar plants, but he gave few details.

EPE has studies for projects of 230kV and 500kV transmission lines and substations that would increase the transportation of power in different regions by around 29GW.

Currently, Brazil's 120,000km transmission grid is limited to transporting capacity between the wind-rich northeastern region to the power hungry southeast to 5GW, which is affecting investors’ appetites at auctions.

The Mines and Energy Ministry is responsible for accepting transmission line projects and organising tenders.