What is Brazil's pathway to limit global warming to 1.5°C?

Power

Decarbonising the power sector

Brazil's power sector emissions have already fallen substantially from their historical peak of around 100 MtCO₂/yr in 2014, reaching approximately 47 MtCO₂/yr in 2023, reflecting the grid's high renewable share.

In 2023, Brazil's power mix was dominated by hydropower at 60%, followed by wind (14%), biomass (8%), solar (7%), gas (5%), nuclear (2%), and coal (2%), with oil playing a marginal role. Renewables accounted for 88% of electricity generation in 2024,1 making Brazil's grid one of the most decarbonised in the world.

The energy transition in Brazil's power sector has gained significant momentum, particularly in solar deployment. Solar energy surpassed 48 GW of installed capacity in 2024, more than doubling in just 5 years, with wind and solar together delivering 24% of electricity in 2024. Wind power reached over 29 GW in 2024,2 with 890 wind farms operating across 12 states, 85% of them located in the Northeast region. Solar projects (utility scale and distributed) are projected to account for nearly 70% of all additional electricity generation in the coming years.3

The rapid expansion of renewables has created new challenges. The surge in intermittent wind and solar generation has outpaced the country's ability to absorb and transmit power. This is a result of insufficient investment in transmission and storage infrastructure, leading to a sharp rise in curtailment: roughly 20% of available solar and wind energy was lost due to grid constraints in 2024, resulting in losses around USD 1bn. To address this, Brazil is entering a major transmission investment cycle, with government estimates of up to R$120 billion in transmission investments through 2030. It is also preparing its first-ever battery storage auction, scheduled for December 2026.4 However, despite the clean electricity profile, gas production increased 23.9% in 2024, compared to 2023, reflecting a growing reliance on gas as backup capacity, particularly during periods of reduced hydropower output.

Brazil's power mix

terawatt-hour per year

Scaling

The HPA scenario requires Brazil's power sector to undergo further transformation, driven primarily by wind and solar expansion while rapidly phasing out fossil fuels. Total electricity generation grows 70% by 2035 and almost four-fold by 2050 compared to 2023 levels, reflecting the deep electrification of end-use sectors including transport and industry. It is important to note that the model does not account for grid losses, which would increase the actual generation requirements.

Renewables — already at 89% of the power mix in 2023 — would reach 98% by 2035 and nearly 100% by 2050. Wind and solar must grow from just over one-fifth of generation in 2023 to half by 2035 and 74% by 2050, taking over from hydropower as the backbone of the system. Wind generation must more than double by 2030 and grow fivefold to 413 TWh by 2035, before continuing to scale to 1400 TWh by 2050, accounting for more than half of the power mix. Solar scales rapidly in the near term but plays a complementary role long-term, over-doubling by 2035 to 122 TWh and reaching 467 TWh by 2050 (17% of the mix). Hydro remains important in absolute terms, with generation growing through 2060, but steadily gives way as the dominant source, making room for variable renewables to drive the next phase of the transition.

On the fossil fuel side, the direction is clear and the timeline tight. Oil exits the power sector entirely by 2035. Gas is reduced to a negligible role by 2035 and eliminated altogether by 2070, requiring alternative sources of flexibility such as storage and demand response to fill its place. Coal, already minor, follows a similar exit path. By 2035, fossil fuels account for no more than around 1% of generation, down from 8.7% today. The importance of this build-out extends well beyond the power sector — a clean grid is the prerequisite for electrification to deliver real emissions reductions across transport, buildings and industry, and is therefore central to Brazil's path to net zero.

Under the HPA scenario, emissions in the power sector decline steeply from 2025, crossing net zero around 2035 — consistent with the near-complete phase-out of fossil fuel generation at that point. The sector’s carbon intensity follows the same pattern. The precise composition and sources of the negative emissions in the model is an active area of research. The focus should be given on achieving net zero and reducing residual emissions.

Brazil's power sector emissions and carbon intensity

MtCO₂/yr

Unit

Investments

Rolling out renewables at the scale needed to align with the Paris Agreement will require sustained capital mobilisation. These investments would significantly exceed current investment flows, not only in generation but across transmission, grid, and storage infrastructure.

Under the HPA, Brazil's annual investment in renewable power generation would grow substantially over the coming decades. By 2050, around USD 30 billion will be required per year on average.

Investment in other renewables, especially hydropower, remains the highest and peaks between 2035 and 2040 at roughly USD 22 billion per year before gradually declining, reflecting the maturity of Brazil's existing hydro infrastructure, which is costly in the near-term, and a shift toward other renewable technologies.5 Wind and solar energy dominate the long-term growth trajectory, with wind rising from around USD 5.8 billion per year in 2030 to over USD 14 billion by 2050. Solar investment, while currently modest at around USD 1.5 billion annually, is expected to roughly double by the mid-2030s before stabilising.

Brazil's renewable electricity investments and capacities

Billion USD / yr

Scaling

Dimension

  • Graph description

    Average annual investments in power sector renewable electricity capacity and cumulative installed power capacities across time based on the HPA scenario.

    Methodology

These model projections capture centralised generation only and should be read alongside observed total-market investment data, which is considerably larger, as it also includes transmission and storage infrastructure. Combined solar and wind investment – including distributed generation – reached approximately USD 17.5 billion in 2023, a record year for both sectors, before declining to around USD 12 billion in 2024, a fall of roughly 31%. The contraction was particularly sharp in wind, given solar is buffered by distributed generation.

Furthermore, HPA figures do not account for substantial additional capital required for transmission upgrades, grid modernisation, and storage. Between 2018 and 2022, around USD 11 billion was already invested in transmission from private investors and the Brazilian National Development Bank (BNDES).6

In absolute capacity terms, in a 1.5ºC aligned scenario, solar capacity would reach 57.5 GW and wind capacity would reach 81 GW in Brazil by 2030. Based on current trajectories, Brazil is almost on track for 2030: in 2024, solar surpassed 48 GW, more than doubling in a few years, while wind reached over 29 GW.7 Brazil's Ten-Year Energy Expansion Plan 2035 explicitly targets 107 GW of solar by 2035,8 which aligns with our 1.5ºC aligned scenario, which projects 112 GW and highlights the vast potential in the country. The key risk is that momentum slows: solar capacity additions decelerated in the first half of 2025, with 7.1 GW installed compared to 9.9 GW in the first half of 2024 due to grid-connection queues, regulatory uncertainty and reduced incentives.9

Brazil has developed a layered set of domestic financing instruments to channel private capital into the energy transition, reducing dependence on public budgets alone. A key instrument is the incentivised debentures established under Law 12,431/2011, which offer retail investors income tax exemptions on returns and have been an important capital market vehicle for utility-scale renewable energy finance. The energy sector has consistently been their largest issuer.

BNDES also channels long-term subsidised financing through its Finem programme and the Climate Fund and has accessed international capital markets through green and sustainability bonds since 2017. The Banco do Nordeste (BNB) plays a parallel role in the Northeast through its Constitutional Financing Fund (FNE),10 offering long-tenor concessional credit to wind and solar projects in the region where most of Brazil's wind capacity is concentrated

1.5°C compatible power sector benchmarks

Carbon intensity, renewable generation share, and fossil fuel generation share from 1.5°C pathway based on the HPA scenario for Brazil

Indicator
2023
2030
2035
2040
2050
2060
2070
Power sector decarbonised by
Carbon intensity of power
gCO₂/kWh
66
36
9
1
-6
-4
0
2038
Relative to reference year in %
-45%
-86%
-98%
-109%
-106%
-100%
Indicator
2023
2030
2035
2040
2050
2060
2070
Share of unabated coal
%
2
1
0
0
0
0
0
Share of unabated gas
%
5
3
1
0
0
0
0
Share of renewable energy
%
81
86
91
93
95
96
97

The HPA scenario rapidly scales CDR from the 2030s onwards, with engineered removals reaching around 5 GtCO2/yr by 2050, supported by limited removals of around 2 GtCO2/yr from the land-use system. The HPA scenario avoids large-scale nature-based CDR, given the risks of overreliance on natural sinks in a warming world. 
All values are rounded

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