Growth of Installed Capacity
Solar energy has stood out as one of the main sources of renewable energy in Brazil. According to Absolar, the installed capacity of solar energy in the country has reached the milestone of 40 GW. This expansion is driven by the economic viability of solar energy, making it an increasingly attractive alternative for investors and consumers. According to Absolar’s calculations, the photovoltaic sector has already prevented the emission of 48.9 million tons of CO2 in electricity production. This was made possible due to the clean and renewable generation provided by the 40 GW of solar capacity currently in operation in the country.
The free energy market is one of the major contributors to this expansion. By allowing consumers to choose their energy suppliers, it promotes competitiveness and encourages the use of renewable sources. According to Inês Gaspar, Product Manager for Brazil at Aurora, the development of economically viable technologies will be crucial for this transition. Hydroelectric plants, on the other hand, will see their share reduced from 51% in 2023 to only 19% in 2060 due to the lack of incentives to increase their capacity.
The expansion of solar energy should also consider the integration of other energy sources to ensure supply security. Thermal power plants, for example, will play a significant role in complementing the intermittent generation of renewable sources. This balance will be fundamental to sustaining the continuous growth of solar energy in Brazil.
Challenges of the Free Energy Market
Despite the opportunities, the free energy market presents specific challenges for solar energy. The variation of the Settlement Price of Differences (PLD) is one of the main factors impacting the profitability of solar projects. In 2023, for the first time, there was a -3% discount on the average capture price of solar energy compared to the PLD, indicating that investors need to adjust their strategies to avoid losses.
In the coming years, the forecast is that the discount on the capture price of solar energy compared to the PLD will reach 10%. This means that, when planning new projects, investors should consider an average price of R$ 190/MWh instead of the expected R$ 200/MWh. This trend of steeper discounts is a challenge that requires careful management and strategic planning to ensure the economic viability of solar energy investments.
Additionally, “cannibalization” in the solar sector is a phenomenon that must be monitored. The concentrated generation of solar energy during certain hours of the day can result in lower prices during these periods, requiring investors to be attentive to the hourly capture price. Adapting to these market conditions will be essential to maximize financial returns and ensure the sustainability of solar projects.
Future of Solar Energy in Brazil
The future of solar energy in Brazil is promising, with the forecast of adding 370 GW to the electricity matrix by 2060. This growth reflects the confidence in the capacity of renewable energies to meet the increasing demand for clean and sustainable energy. Aurora Energy Research projects that, starting in 2031, the average PLD in Brazil will be approximately R$ 260/MWh, representing a significant opportunity for solar energy to consolidate as a competitive and viable source.
To achieve these goals, it will be necessary to continue promoting incentive policies and developing technologies that increase efficiency and reduce the costs of solar generation. The integration of energy storage systems can also help mitigate the effects of intermittency and improve the stability of the electricity grid.
The commitment to sustainability and the transition to a cleaner energy matrix positions Brazil as a global leader in renewable energies. With the planned expansion of solar energy, the country has the potential to significantly reduce its carbon emissions and promote sustainable economic development, benefiting both the environment and society as a whole.
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