Key Points
- Brazil’s electricity grid is now 84.6% renewable, with solar and wind together supplying nearly 25% of national generation — making it one of the world’s cleanest large-power systems.
- Solar capacity surpassed 68 GW by early 2026 while the offshore wind pipeline exceeds 189 GW in environmental licensing, anchored by a landmark 2025 Offshore Wind Law (Law No. 15,097).
- The Pecém Green Hydrogen Hub in Ceará is attracting up to USD 18 billion from investors including Fortescue, backed by World Bank financing and EU partnership corridors targeting European hydrogen imports by the early 2030s.
RioTimes Deep Analysis | Series: Brazil Guide
Brazil entered 2026 as one of the world’s most dynamic clean energy markets — not because it is catching up, but because it is accelerating a transition already decades ahead of most peers. With hydropower as its foundation and wind and solar rapidly diversifying the mix, the country is now building the regulatory architecture for offshore wind, green hydrogen export, and carbon trading that will define its energy identity through 2030 and beyond.
Energy Matrix Overview
Brazil’s electricity system is structurally different from almost every other major economy. As of January 1, 2026, total installed large-scale generation capacity reached 215.9 GW, of which renewables account for 84.6%, according to the national regulator ANEEL. In 2024, renewable sources supplied 88.2% of electricity generation, while the broader energy mix — including fuels — reached 50% renewability, its highest since 1989, per EPE’s 2025 Brazilian Energy Balance.
Hydropower remains the anchor, contributing 47.6% of installed capacity and roughly 52% of actual generation. Wind power holds 16.1% of installed capacity and solar 9.3% (large-scale only). Biomass, nuclear, and thermal plants make up the remainder. The country’s share of renewables is almost four times the global average of 14.2% and well above OECD peers.
| Energy Source | Share of Installed Capacity (Jan 2026) | Key Trend |
|---|---|---|
| Hydropower | 47.6% | Stable; drought risk rising |
| Thermal (incl. gas, coal, biomass) | 22.9% | Gas capacity added for reliability |
| Wind (onshore) | 16.1% | Strong growth; offshore pipeline forming |
| Solar PV (large-scale) | 9.3% | Fastest-growing; distributed DG also booming |
| Nuclear | ~1% | Stable at ~2 GW (Angra 1 & 2) |
A landmark milestone came in August 2025, when wind and solar combined to produce more than a third of Brazil’s electricity for the first time in a single month — generating a record 19 TWh, enough to power roughly 119 million average Brazilian homes. Brazil is the only G20 country currently on track to meet the COP28 goal of tripling renewable energy capacity by 2030.
“Wind and solar are not alternative sources — they are already a well-represented part of Brazil’s electricity mix.” — Energy sector analyst cited by Ember/AP, 2025
Wind Power Surge
Brazil’s onshore wind sector added 1.82 GW across 43 new wind farms in 2025, bringing cumulative installed capacity to 29.6 GW by the end of 2024 and growing through 2025, according to EPE. Wind generation reached 107.7 TWh in 2024, up 12.4% year-on-year. The Northeast — specifically Bahia, Rio Grande do Norte, Ceará, and Piauí — hosts the bulk of installations, where wind speeds of 7–10 m/s yield capacity factors that routinely exceed international averages.
Seasonal complementarity is a key strategic advantage: wind generation peaks between June and November, precisely during the hydroelectric low season, providing natural balancing for the grid. Projections by the Brazilian Energy Research Agency (EPE via IntechOpen) indicate wind will reach 16% of the national electricity mix by 2029. A major near-term signal is the Dom Inocêncio wind project — an 828 MW facility in Piauí, where Casa dos Ventos has ordered over 100 Vestas turbines, with construction starting in 2026 and commissioning targeted for 2028, making it the first major new wind project approved in Brazil since 2023.
Offshore Wind: A 1,200 GW Frontier
Brazil has no offshore wind capacity in operation today, but its pipeline is among the largest in the world. As of early 2026, Brazil’s federal environmental agency IBAMA is reviewing 104 environmental licensing requests for offshore projects, with a combined capacity exceeding 247 GW under active analysis — from a total pipeline of 189+ GW across approximately 78–97 submitted project areas, per Global Energy Monitor. The World Bank estimates Brazil’s total offshore wind technical potential at 1,200 GW — 480 GW fixed-bottom and 748 GW floating.
The sector received its key legal foundation with Law No. 15,097 (January 2025), the Offshore Wind Law, which established the regulatory basis for project licensing, concessions, and area management. In October 2025, the National Energy Policy Council (CNPE) approved the creation of the Offshore Wind Working Group (GT-EO) to implement the new law, including a Single Offshore Area Management Portal to streamline approvals. In April 2026, CNPE approved regulatory guidelines including a 12 nautical-mile baseline reference distance for offshore areas.
Economic projections estimate offshore wind could generate up to 516,000 jobs and contribute R$902 billion to Brazil’s GDP by 2050. Petrobras secured Brazil’s first-ever preliminary offshore wind license in June 2025 for a 24.5 MW pilot project off Rio de Janeiro, while its partnership with Equinor covers evaluation of up to 14.5 GW across seven offshore projects.
Solar Boom
Solar energy is Brazil’s fastest-growing power technology by virtually every measure. Cumulative installed PV capacity stood at 68 GW by early 2026 — including approximately 46 GW of distributed generation and 22.3 GW of centralized (utility-scale) capacity — according to PV Magazine/ANEEL. Brazil ranked second globally in new solar installations in 2024, behind only India, the US, and China.
Distributed Generation (DG)
DG — rooftop systems for homes, businesses, and rural properties — has been the primary driver of solar expansion, enabled by the Distributed Generation Legal Framework (Law 14,300/2022). Distributed capacity surged from under 1 GW in 2018 to 40 GW by mid-2025, accounting for 43% of all electricity capacity additions over that period, per the US Energy Information Administration. More than 3.7 million renewable distributed generation systems have been installed. São Paulo, Minas Gerais, and Paraná lead in installed DG capacity.
Utility-Scale Solar
Utility-scale solar added 2.81 GW across 63 new power plants in 2025, according to ANEEL. However, a sharp increase in curtailment — where excess solar generation is diverted from the grid — emerged as a constraint: in November 2025, approximately 28% of all curtailed energy came from photovoltaic plants. The government responded with Provisional Measure 1304 (2025), establishing compensation mechanisms and directing the ONS to implement clearer curtailment protocols.
Looking ahead, ANEEL forecasts centralized solar additions of 4.95 GW in 2026, nearly double the 2025 figure, as grid investment catches up. By end-2026, cumulative PV capacity is projected to exceed 75.9 GW. The Brazilian Photovoltaic Solar Energy Association (Absolar) projects solar investments of USD 5.8 billion in 2026 alone.
Green Hydrogen Frontier
Brazil is positioning itself as a future global green hydrogen exporter, leveraging its renewable resource abundance — solar irradiation of 1,500–2,500 kWh/m²/year and world-class wind resources — combined with deepwater port access and a competitive cost structure. The legal framework advanced significantly with Law No. 14,948/2024, which establishes the framework for low-carbon hydrogen, including R$18.3 billion in incentives, a national certification scheme (SBCH2), and the Rehidro tax regime.
The Pecém Hub, Ceará
The Pecém Industrial and Port Complex (CIPP) in Ceará is the centerpiece of Brazil’s hydrogen ambitions. Launched as a collaborative initiative by the Pecém Complex, the Federation of Industries of Ceará (FIEC), and the Federal University of Ceará (UFC), the Pecém Verde project has attracted a constellation of international backers. In July 2025, the World Bank approved USD 134 million in financing to support CIPP’s green hydrogen strategy. The Climate Investment Funds (CIF) contributed a USD 35 million concessional package — including a $33.5 million loan and $1.5 million grant — for critical hydrogen production infrastructure.
Australian mining giant Fortescue, led by billionaire Andrew Forrest, has signed agreements with Pecém potentially worth up to USD 18 billion, with final investment decisions by 2026 and production targeted by end-2027. Six other companies have also signed pre-contracts at Pecém. The hub has signed Green Hydrogen Corridor MOUs with the Port of Rotterdam, duisport (Duisburg), and Port of Rostock in Germany, extending direct supply corridors to Northwest Europe and the Baltic.
In October 2025, Ceará and the State of North Rhine-Westphalia (Germany) signed an MOU at the H2 LATAM Summit in Fortaleza, deepening energy and industrial cooperation. The ZPE Ceará free trade zone was recognized by the Financial Times’ fDi Intelligence as the Best Free Trade Zone in the World in 2025 — a significant signal for export-oriented green hydrogen investment.
Port of Açu and EU Export Corridors
Beyond Pecém, the Port of Açu (Rio de Janeiro) is emerging as a second major hub. An RMI pre-feasibility study presented at the Oceans of Opportunity Summit in late 2025 identified the Açu–Antwerp corridor as a high-potential green e-fuel export route, with operations targeted between 2030 and 2035. Açu-based developers have announced projects of up to 800,000 metric tons/year of e-methanol and 2.5 million metric tons/year of e-ammonia. Brazil has the potential to supply up to 40% of Europe’s green hydrogen demand by 2040, according to multiple export scenario analyses.
Investment Landscape
Foreign Direct Investment and Capital Flows
Brazil recorded its highest FDI inflow since 2014 in 2025, with USD 84.1 billion flowing in from January through November. Renewable energy and green hydrogen alone accounted for approximately 34% of that total, according to data from Brazil’s Central Bank and Development Ministry. Industrial Info Resources is tracking more than 1,900 renewable and energy storage projects worth over USD 629 billion.
BloombergNEF estimates Brazil will need more than USD 700 billion by 2050 to reach carbon neutrality, requiring USD 15 billion per year in wind and solar alone by decade’s end. The Climate Policy Initiative reports international clean energy financing to Brazil reached USD 1.5 billion per year between 2021 and 2023, up 25% from the prior three-year period.
Petrobras Energy Transition Strategy
Brazil’s state energy giant Petrobras is navigating a dual mandate: maintaining oil and gas output while scaling clean energy. Its 2025–2029 Business Plan allocates USD 111 billion total, with USD 16.3 billion (up 41%) dedicated to energy transition initiatives — including USD 2.2 billion for ethanol, USD 1.5 billion for biorefining, USD 1.4 billion for hydrogen and CCUS, and USD 600 million each for biodiesel and biogas. The Riograndense refinery is being converted into Brazil’s first biorefinery at a cost of approximately USD 960 million, to produce sustainable aviation fuel (SAF) and green diesel.
Petrobras secured Brazil’s first-ever preliminary offshore wind license in June 2025 for a 24.5 MW pilot project off Rio de Janeiro. It renewed its strategic partnership with Equinor to evaluate seven offshore wind projects representing up to 14.5 GW of potential capacity. The company also secured a USD 1.1 billion decarbonization loan from Banco do Brasil in early 2025.
ANEEL Auctions and Regulatory Framework
Brazil’s energy market regulation has been substantially updated since 2022. Key legislation includes:
- Law No. 14,300/2022 — Distributed Generation Legal Framework (net metering)
- Law No. 14,948/2024 — Low-Carbon Hydrogen legal framework
- Law No. 14,993/2024 — “Fuel of the Future” law (SAF, green diesel, biomethane)
- Law No. 15,097/2025 — Offshore Wind Law
- Law No. 15,042/2024 — Brazilian Greenhouse Gas Emissions Trading System (SBCE)
ANEEL’s 2026 Long-Term Reserve Capacity Auction (LRCAP), held in March 2026, contracted approximately 19 GW of firm capacity — the largest reliability-focused procurement to date — expected to mobilize USD 12–13 billion in investments. A first-ever dedicated battery energy storage (BESS) auction is scheduled for April 2026, with 18 GW of projects registered, targeting USD 2 billion in procurement for grid stability infrastructure.
Grid Modernization
Grid infrastructure is the critical bottleneck. The government plans two major transmission auctions in 2026 — one in March (888 km of new lines, BRL 5.7 billion) and a second later in the year (3,500+ km, BRL 20+ billion). Total grid investment through 2030 is estimated at up to BRL 120 billion. The government is also investing BRL 9.5 billion in new transmission lines to support future offshore wind connections.
Carbon Market Development
Brazil’s regulated carbon market — the Sistema Brasileiro de Comércio de Emissões (SBCE), established by Law 15,042/2024 — is entering its implementation phase. In October 2025, the government published three decrees creating the Extraordinary Secretariat for the Carbon Market within the Ministry of Finance, to temporarily manage SBCE until a permanent regulatory body is established. The system will cover entities emitting more than 25,000 tCO₂e per year across all sectors except agriculture, with reporting obligations for those above 10,000 tCO₂e. Demand for Brazilian carbon credits could grow by up to 530% from 2030 onwards, according to ICC Brasil analysis, as the SBCE comes online and Article 6 (Paris Agreement) mechanisms mature.
Key Challenges Ahead
Despite its renewable leadership, Brazil faces structural headwinds:
- Drought risk to hydropower: Chronic low rainfall has driven hydro output to multi-year lows in drought years, forcing fossil fuel backup to spike from 6% to 26% of monthly generation. Climate change intensifies this risk.
- Grid congestion and curtailment: The Northeast’s renewable boom has outpaced transmission capacity. By late 2025, curtailment was affecting 28% of solar generation in peak periods. Offshore wind will require entirely new submarine cable infrastructure.
- Intermittency and storage deficit: Brazil has virtually no utility-scale battery storage; the April 2026 BESS auction is the first step toward rectifying this.
- Green hydrogen cost competitiveness: Electrolyzer costs, freshwater access, and port logistics remain barriers to commercial-scale production at globally competitive prices.
- Capital costs for SMEs: Investment remains concentrated among large players; high cost of capital for small and medium renewable projects continues to limit market breadth.
Related Coverage on Rio Times Online
Sources
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This article is part of The Rio Times’ guide series, offering in-depth analysis for investors, expats, and analysts tracking Latin America. This article does not constitute investment advice.