Brazil’s energy transformation over the coming decades will require more than climate ambition: it will demand aggressive planning and investments worth billions. Even if the country fails to meet its goal of reaching net-zero greenhouse gas emissions by 2050, the need to triple its installed electricity generation capacity is an unavoidable path.
The data comes from BloombergNEF (BNEF), Bloomberg’s energy transition research arm, which estimates that Brazil’s currently installed power capacity — around 235 gigawatts (GW) — will need to jump to at least 574 GW by 2050. And if the country stays firmly on course toward climate neutrality, this number should reach an impressive 842 GW.
Energy-related emissions and net-zero carbon budget, Economic Transition Scenario and Net-Zero Scenario
This represents an unprecedented leap in Brazil’s electric system. Moreover, it will be necessary even if the country follows an “economic” scenario, where the energy transition is driven by cost rather than environmental commitments. The reason? The advance of electrification in industry, transportation, and urban infrastructure.
“Brazil’s energy transition is happening much more for economic reasons than for climate ones. The drop in prices of clean technologies is making electrification more competitive and inevitable,” explains Vinicius Nunes, head of Brazilian energy transition market research at BloombergNEF.
The analysis considers that, even without specific public policies, electricity will become dominant in Brazil’s final energy mix. One example is the growing popularity of electric cars: for drivers who travel more than 16,000 kilometers a year, this option is already cheaper than combustion models — and that difference is expected to grow in the coming years, according to BNEF.
Energy-related emissions and net-zero carbon budget, Economic Transition Scenario and Net-Zero Scenario
This shift away from fossil fuels — such as gas, coal, and oil — will occur mostly through electricity. In the net-zero emissions scenario, electrification will account for more than half (55%) of fossil fuel reduction. Of this total, around 70% will come from the switch from combustion cars to electric vehicles, and the remaining 30% from the electrification of industrial processes, which still heavily rely on fossil fuels.
But the replacement of fossil fuels won’t rely solely on electricity. Other technologies will play complementary, yet equally important, roles. BloombergNEF projects that low-emission hydrogen — known as green or blue hydrogen, depending on its source — could account for 10% of fossil fuel replacement, especially in heavy industry and long-distance transport.
Another strategic technology will be carbon capture and storage (CCS), which is expected to account for 9% of the replacement. This means developing infrastructure capable of removing carbon dioxide from the atmosphere or industrial processes and storing it safely. Though still scarcely adopted in Brazil, CCS is considered essential for hard-to-decarbonize sectors like steelmaking and cement production.
Biofuels, in turn, account for an 8% share in the effort to reduce fossil use, with potential to grow depending on adopted public policy. Brazil, one of the world’s largest ethanol producers, wants to expand its influence in this market and is working alongside countries like India to promote biofuels as a transition solution in international forums. This stance pleases automakers outside of China, as it allows the combustion engine production chain to remain active longer, especially through hybrid models.
However, BNEF notes that the role of these alternative technologies only becomes significant in a deep transition scenario. “Green hydrogen, SAF (sustainable aviation fuel), carbon capture — these technologies are not yet economically viable in Brazil without strong government support. These are sectors that depend directly on subsidies and aggressive public policy,” says Nunes.
On the other hand, technologies like solar and wind energy, as well as battery systems, will be heavily demanded even in a milder, economy-driven transition scenario. That’s because, according to BNEF, these sources are already cheaper than fossil alternatives in many regions of Brazil, even without incentives.
Renewable and nuclear electricity generation will also play a crucial role: it will be responsible for replacing the 10% of current Brazilian energy demand that is still met by fossil fuels in the power sector. While this substitution may seem small compared to the overall energy matrix, it represents a symbolic milestone in the advance of clean energy over thermal power — currently dependent on natural gas, coal, and fuel oil.
This growth, however, clashes with a current paradox in the sector: despite needing to expand its installed capacity, Brazil already experiences moments of energy surplus, especially during solar production peaks. This forces the National System Operator (ONS) to curtail generation from some plants, frustrating investors and operators in the sector.
“It’s the classic chicken-and-egg problem,” says Nunes. “The electric sector wants to attract more demand, but demand doesn’t grow fast enough to absorb all the new supply. This creates tensions in the system and may discourage investments.”
The solution, according to him, lies in stimulating electricity consumption growth in sectors that still use other energy sources. “There are industries where pure electrification still doesn’t pay off economically, but with incentives and planning, it’s possible to unlock that potential,” he explains.
The required investment volume is colossal. BloombergNEF estimates that in the economic scenario — where the country does not reach net-zero — Brazil will need to invest US$ 5.6 trillion in energy by 2050. Of that total, US$ 4.3 trillion should be directed toward the demand side, such as fleet electrification and industrial modernization. In the net-zero scenario, the total investment rises to US$ 6 trillion, with the same amount going toward demand and the remainder into expanding and diversifying energy supply.
The National Energy Plan 2050 (PNE 2050), from the Energy Research Company (EPE), reinforces this vision by projecting a more diversified and clean energy matrix — but with strong dependence on structural policies and regulatory stability.
Beyond climate goals, what’s at stake is the country’s economic competitiveness. “The energy transition can be a competitive edge for Brazil, but also a bottleneck if not managed with planning and efficiency,” concludes Nunes.
The race for electrification has already begun — and Brazil, even if it’s not chasing the gold medal of environmental targets, will have to run to keep the lights on.
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