Brazil's Roadmap to Energy Dominance and Climate Probity

    6 December 2013

    Brazil is currently maintaining one of the least carbon-intensive economies in the world supported by a range of climate change regulations. Yet, as this month’s International Energy Agency (IEA) World Energy Outlook Report 2013 confirms, Brazil will also enjoy a huge expansion in its energy sector to 2035.

    Brazils efforts to combat climate change from a regulatory perspective is contained in the Proclamation of Law No.12.187/2009, which created a domestic legal institution for Brazil and its 27 states and municipalities also outlines principles which guide public policy. The enabling nature of Brazil’s climate regulatory framework is seen as facilitating a low carbon economy whilst also enabling the huge expansion in its energy sector as foreshadowed by the IEA Report. Brazil is therefore successfully sustaining a fine balancing act. Even though Brazil is already a world leader in renewable energy in 2013, this is projected by the IEA to almost double by 2035 to 43 percent share of the domestic energy mix and whilst the IEA predict that Brazil’s per-capita CO2 emissions will increase by 50 percent to reach three tons of CO2, this will still only 70 percent of the world average in 2035.

    The other principal IEA findings are as follows.


    Brazil’s resources are abundant and diverse; their development over the coming decades will move the country into the top ranks of global energy producers. More super-giant fields have been discovered in Brazil over the last 10 years than in any other country. These offshore discoveries have confirmed Brazil’s status as one of the world’s foremost oil and gas provinces. But Brazil’s resources are not limited to hydrocarbons: it has an estimated 245 GW of hydropower potential (around two-thirds of which has yet to be developed), wind power potential approaching 350 GW and considerable solar potential.

    Brazil’s energy sector will undergo a huge expansion between now and 2035. Brazil will, therefore, play a central role in meeting the world’s oil needs through to 2035, making it the world’s sixth-largest oil producer by 2035. This growth will be heavily dependent on highly complex and capital-intensive deepwater developments, Brazil is set to consolidate its position as the global leader, accounting for almost 60 percent of global deepwater production in 2035.


    Brazil’s primary energy demand will rise by 80 percent in the New Policies Scenario to reach 480 Mtoe in 2035, spurring and accompanying steady growth in economic output. Consumption in the end-use sectors has doubled since 1990, and is set to grow robustly, led by industry (80 percent increase), followed by transport (77 percent) and buildings (66 percent). Brazil will achieve its goal of providing universal energy access early in the projection period. Electricity demand will double to reach 940 TWh in 2035. If the Amazon were to prove to be off-limits for new hydropower projects, then the 70 GW expansion of hydropower foreseen in the New Policies Scenario would largely exhaust Brazil’s remaining hydro potential. Most of the anticipated growth in capacity is expected to come from run-of-river projects, increasing the contingency of power output on natural and seasonal variations. Wind resources are already being harnessed on a competitive basis and continue to be developed, particularly in the northeast of Brazil where wind projects are operating at very high capacity factors. Natural gas remains prized as a reliable complementary source of power with generation capacity quadrupling, to 40 GW, in 2035.


    A pivotal factor in shaping Brazil’s energy outlook will be the country’s success in maintaining high levels of investment, which average $90 billion per year. Almost two-thirds of this is required in the oil sector and more than a quarter to expand power generation and the transmission network. The heaviest burden lies with Petrobras, the world’s largest deepwater operator, placing an emphasis on its ability to deploy resources effectively across a huge and varied investment programme.


    Brazil’s production of biofuels will expand more than three-fold to 1 million barrels of oil equivalent per day in 2035. Suitable cultivation zones are more than sufficient to achieve this expansion in supply without impinging upon environmentally sensitive areas. Sugarcane ethanol continues to dominate biofuels supply, with more than 80 percent of the total. Biofuels will account for nearly one-third of the energy used in road transport by 2035, enhancing the energy performance of the transport sector and helping to slow the growth in demand for oil products.