About the Report
Executive Summary
In 2023, Brazil's electric energy sector recorded an installed capacity of 225.2 GW, reflecting a 9.6% y/y
increase from 205.5 GW in 2022, marking the largest single-year expansion since the EPE's inception in
2004. Renewable energy sources strengthened their dominant position, accounting for 89.2% of total
capacity, up from 79.6% in 2022. The wind and solar segments were the primary drivers, adding 4.9 GW
and 13.4 GW, respectively, compared to a combined 13.5 GW added in 2022. In 2023, solar capacity
continued its rapid expansion, surging by 57.3% y/y, reinforcing its position as the second-largest energy
source in Brazil’s installed capacity mix.
Meanwhile, hydropower capacity, while still the largest contributor, saw its share decline to 49% in 2023, from 53.4% in 2022, reflecting Brazil's ongoing diversification strategy. Electricity tariffs continued to rise, driven by inflationary pressures, fuel price volatility and increased reliance on thermal plants during dry periods. In 2023, the average tariff of residential electricity rose by an average of 0.5% y/y, following a 4.2% increase in 2022. These cost increases impacted household energy expenditures and contributed to the migration towards distributed generation, particularly solar, as consumers sought energy cost reductions.
Additionally, free market participation continued to expand, with an increasing number of large commercial and industrial consumers opting for ACL contracts, benefiting from more competitive pricing and long-term contract flexibility. The policy environment remained supportive, with initiatives such as the New Growth Acceleration Programme (Novo PAC) and Ten-Year Energy Expansion Plan (PDE 2034) providing a roadmap for future investments. While tariff increases and hydrological risks posed challenges, the sector's resilience was evident in its continued diversification and expansion, reinforcing Brazil’s position as one of the world’s largest renewable energy markets.
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