- Brazil’s solar and onshore wind power capacity shares are projected to rise from 21% in 2023 to 54% by 2060. However, thermal power will remain essential to meet demand during low renewable output periods.
- From 2024 to 2060, emissions in Spain and the UK are expected to decrease by 88% and 112%, respectively, to 8.2 gCO2/kWh and –9 gCO2/kWh. Conversely, Brazil’s emissions are projected to increase by 54% to 7.7 gCO2/kWh, according to a new analysis by Aurora Energy Research.
- A lack of regulatory framework and market or government incentives hinders investment in storage systems, making it financially unfeasible to develop and import the necessary technologies.
SAO PAULO (AURORA ENERGY RESEARCH)—The British electricity sector emits 26 times more (132 gCO2/kWh) than the hydro-based Brazilian sector today (5 gCO2/kWh); however, Brazil is projected to become a higher emitter than Great Britain by 2047, a new analysis from the leading global power analytics provider, Aurora Energy Research, reveals.
From 2024 to 2060, emissions in Spain and the UK are expected to decrease by 88% and 112%, respectively, to 8.2 gCO2/kWh and –15.9 gCO2/kWh. Conversely, Brazil’s emissions are projected to increase by 54% to 7.7 gCO2/kWh, the analysis finds.
Rising demand and market liberalisation are driving Brazil to expand its power system. With hydroelectric power growth limited by river constraints and environmental concerns, solar and onshore wind power capacity shares are set to rise from 21% in 2023 to 54% in 2060. However, given the intermittent nature of these sources and the current regulatory context, thermal energy will remain crucial to provide supply security during periods of low renewable energy production.
Carbon-neutral forms of system resilience, such as battery systems and pumped hydro storage, are hindered by the current regulatory framework. Investments in these technologies are not financially attractive, as storage systems are not compensated for providing ancillary services. Additionally, there is a lack of government mechanisms to help investors manage the high costs of developing and importing these technologies, Aurora assesses.
Unlike Spain, where a competitive subsidy framework has been implemented to help mitigate the costs of these ventures, in Brazil, capacity reserve auctions—mechanisms created to build capacity to meet demand during peak hours and when renewables are not generating—are relying on the growth of thermal power plants. In 2021, only thermal plants participated in the call, and for the August auction, despite adding expansion of existing hydro for the first time, further expansion of these plants is expected.
In addition, existing regulations in Brazil create uncertainty, particularly regarding tariffs and licensing, as storage systems have dual roles in consumption and generation. This hampers investment in storage projects, limiting their contribution to carbon emission reduction and grid stability.
Inês Gaspar, Product Manager, at Aurora Energy Research, says:
“Thermal assets have a role in providing flexibility and security of supply, but without regulation and without a market structure incentivising carbon-free solutions like hydro and storage, Brazil risks reaching higher carbon emissions by 2047 than those of Great Britain, diverging from Europe’s path to Net Zero.”
– ENDS –
MEDIA CONTACT
Zina Fragkiadaki, Press Officer | +44 (0) 7747 219 913
zinovia.fragkiadaki@auroraer.com
ABOUT AURORA ENERGY RESEARCH
Established in 2013, Aurora Energy Research is a leading global provider of power market forecasting and analytics for critical investment and financing decisions. Headquartered in Oxford, we operate out of 14 offices worldwide covering Europe, North & South America, Asia, and Australia. Our comprehensive services include market outlook packages for energy industry participants, advisory support, and innovative software solutions. We foster diversity with a team of over 600 experts with backgrounds in energy, finance, and consulting, offering unparalleled expertise across power, renewables, storage, hydrogen, carbon, and fossil commodities. Our mission is to ease the global energy transition through widely trusted quantitative analysis and high-quality decision support.
