In recent years, Brazil’s energy sector has faced significant challenges, mainly due to its dependence on hydroelectric sources. The 2021 water crisis was a turning point, exposing weaknesses in the energy generation and distribution system and raising long-term questions about the country’s energy security. Even in 2024, the impacts of this crisis still resonate, and experts warn that 2025 may bring new challenges unless structural solutions are quickly and effectively implemented.
The Energy Crisis: A Latent Problem
Although Brazil has one of the largest capacities for renewable energy generation in the world, its dependence on hydroelectric plants makes it vulnerable to water crises. The prolonged drought of 2021, considered the most severe in nearly a century, drastically reduced reservoir levels at the main hydroelectric plants. As a result, the government was forced to activate thermoelectric plants, which are more expensive and polluting, driving up energy costs and increasing inflation.
In 2024, although the rains have returned, experts remain concerned about the possibility of new crises in the coming years. According to climatologists’ forecasts, the El Niño weather phenomenon, which can cause severe droughts in some regions, could once again impact Brazil in 2025, putting additional pressure on reservoir levels. This possibility makes the energy crisis not just a memory of the past but a real threat on the horizon.
Brazil’s Energy Matrix: Challenges and Opportunities
Brazil’s energy matrix is diverse, with significant participation from renewable sources such as solar, wind, biomass, and biogas. However, hydroelectric plants still account for about 60% of the country’s energy generation. This dependence creates a significant vulnerability during periods of drought.
The solution lies in diversifying the energy matrix. In recent years, Brazil has made considerable progress in expanding wind and solar energy. In 2024, solar energy reached 32 gigawatts of installed capacity, representing about 12% of Brazil’s electricity matrix. Wind energy, with approximately 23 gigawatts, continues to be one of the leading alternatives to reduce reliance on hydroelectric plants. The Brazilian government has encouraged the expansion of these sources through auctions and tax incentive policies, which have attracted private investments.
In addition, another promising alternative gaining ground in Brazil’s energy landscape is biogas. Derived primarily from organic waste, biogas has the potential to complement the energy matrix, especially in rural areas and regions where agricultural and livestock production is predominant. Biomethane, the purified version of biogas, can be used as fuel for electricity generation and in sectors such as transportation. In 2024, Brazil already has around 300 biogas plants in operation, exemplifying how waste can be transformed into clean and renewable energy.
The Impact of the Energy Crisis on the Economy
The 2021 energy crisis brought a considerable increase in electricity tariffs, putting pressure on the productive sector and consumers. According to the National Electric Energy Agency (ANEEL), the average electricity bill for Brazilians increased by 20% between 2021 and 2023. This increase had direct impacts on inflation, which closed 2023 at 6.5%, above the target set by the Central Bank.
Energy-intensive sectors such as aluminum, steel, and cement industries faced increased production costs, reducing Brazil’s competitiveness in the international market. Small and medium-sized companies were also hit hard, with many being forced to reduce production or even close their doors due to high operational costs.
The outlook for 2025 remains uncertain. Although inflation slowed in 2024, experts warn that a new water crisis or problems in energy infrastructure could lead to further tariff increases, negatively impacting the economy.
Solutions and Perspectives
Brazil’s electricity sector is at a turning point. To prevent a new energy crisis from hitting the country, it is essential to accelerate the transition to a more diversified and resilient energy matrix. The Ten-Year Energy Plan 2023-2032, developed by the Ministry of Mines and Energy, foresees the expansion of renewable energies, with ambitious targets for solar, wind, and biogas generation. However, this transition requires significant investments in infrastructure, energy storage, and modernization of distribution networks.
Furthermore, energy efficiency must be a priority. Incentive programs for the rational use of energy, such as Procel, have the potential to reduce energy demand during critical times. The adoption of smart grid technologies can also help optimize energy distribution and consumption, reducing losses and improving the management of the electrical system.
Biogas, in particular, offers a promising path to diversifying Brazil’s energy matrix. In addition to reducing greenhouse gas emissions by utilizing organic waste, biogas production can promote the circular economy, integrating sectors such as agriculture, livestock, and waste management. With the expansion of biogas plants planned for the coming years, Brazil could establish itself as a leader in generating sustainable energy from waste.
Conclusion
The energy crisis that hit Brazil in 2021 left important lessons about the need for resilience and diversification in the electricity sector. In 2024, the country has already made significant progress in expanding renewable energies such as solar, wind, and biogas, but challenges remain. With the prospect of a new drought cycle in 2025, Brazil must act quickly to ensure energy security, avoiding new economic and social impacts. The future of Brazil’s electricity sector will depend on strategic decisions made today to ensure a stable, sustainable, and accessible energy supply for all.
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