Large hydropower plants account for around 80% of domestic electricity generation, making the Brazilian electricity mix one of the cleanest in the world. Continued expansion of hydropower is increasingly constrained by the remoteness and environmental sensitivity of a large part of the remaining resource. PV projects (utility scale and distributed) will represent nearly 70% of all additions in the coming years. Reliance on other sources for power generation is also growing, notably natural gas, wind (on-shore and off-shore) and bioenergy.

Brazil is a global leader in second generation biofuels and flex-fuel cars provide a large domestic market. Ethanol supply is set to average 660 kb/d in 2026, up 90 kb/d compared with 2020 and 35 kb/d higher than in 2019. A system of contract auctions provides a mechanism to bring forward investment in new generation and transmission capacity, as well as to diversify the power mix.

Large offshore oil and gas discoveries have confirmed Brazil’s status as one of the world’s foremost oil and gas provinces. Pre-salt discoveries also prompted a change in upstream regulation, granting Petrobras – the national oil company – a strengthened role in areas deemed strategic.

Production from the deep-water pre-salt fields in the Santos basin has gained considerable momentum in recent years, offsetting declining output from mature fields elsewhere. Thanks to such successful developments in deep-water production, Brazil turned into a net oil exporter in 2017. As a result, total oil supply is expected to grow by 1.2 mb/d to 4.2 mb/d in 2026, according to IEA forecasts.

At COP26 where Brazil announced a long-term objective to reach net-zero emissions by 2050 and a 50% carbon emissions reduction plan coupled with a zero illegal deforestation target by 2030. This is supported by an announced 2030 climate action plan and a hydrogen national strategy which is being developed.