Northeast Region of Brazil: Leading the Energy Transition

By Daniel Lima – Economist, President of the Northeastern Solar Energy Association, and Vice President of the Brazilian Association of Energy

Export of Clean Energy and Structural Challenges

Over the past 4 years, Brazil's Northeast region has undergone a significant transformation in the national energy landscape. Instead of relying on energy imports from other regions, the Northeast has become an energy exporter, sending an average of 20% of its locally generated energy elsewhere. This energy comes from renewable sources, with 84% of the production derived from wind (44%), solar (22%), and hydro (18%).

The Northeastern Electrical Matrix (MEN) has an installed capacity of 67.1 GW, representing about 30% of the Brazilian Electrical Matrix (MEB), which totals 235.4 GW. In MEN, intermittent sources — solar and wind — constitute 66% of the installed capacity, while dispatchable sources — hydroelectric and thermal — account for 34%. In contrast, the MEB is dominated by dispatchable sources, representing 67% of the capacity, with intermittent sources contributing 33%.

Between 2019 and 2023, the average Load of the Northeast subsystem was 99,834 GWh, while the average Energy Generation reached 119,117 GWh, representing 16.3% and 19.5% of the Load and Generation of the National Interconnected System (SIN), respectively. This increase in generation capacity and the growing share of intermittent sources highlight the urgent need to address two crucial structural challenges:

1.    Expansion of Transmission Capacity: Expanding the transmission network is essential to efficiently transport the energy generated in the Northeast to other regions of the country. Transmission infrastructure must keep pace with generation growth to ensure that produced energy can be effectively transported and utilized.

2.    Increase in Energy Storage Capacity: Implementing Battery Energy Storage Systems (BESS) is crucial for balancing load peaks and energy generation, especially given the intermittent nature of solar and wind sources. Energy storage will help maintain grid stability and maximize the use of clean sources.

These solutions align with the energy transition required for decarbonizing the MEB. Transmission and capacity auctions have the potential to attract private investments for expanding and strengthening electrical infrastructure, leveraging the abundant natural resources available in the Northeast. Additionally, the system operator should continue investing in advanced technologies, including artificial intelligence, to enhance the management and monitoring of SIN.

Finally, it is crucial for the regulatory agency to establish guidelines for the implementation and operation of BESS as soon as possible. These measures will ensure that the Northeast continues to play a vital role in clean energy generation and national grid stability, promoting a more sustainable and efficient future for Brazil.

Investments in Clean Energy Generation

Over the past decade, Brazil's Northeast region has emerged as a leading hub for clean energy generation, attracting approximately R$ 180 billion in investments focused on wind and solar sources.

These investments have resulted in an installed capacity of 29.3 GW from wind farms and 8.8 GW from large-scale photovoltaic plants, in addition to 6.1 GW from photovoltaic micro and mini-generation (MMGD). Complementing this landscape, the region also received R$ 120 billion in investments for expanding hydro sources, totaling 12.1 GW.

If the Northeast region were a country, its electrical matrix would be the cleanest in the world, with 84% of its generation capacity coming from renewable sources.

This progress has enabled the region to transition from being an energy importer to an exporter, sending an average of 20% of its produced energy over the past four years.

The future of the region looks very promising, with expansion prospects including the commissioning of the first Green Hydrogen production plants and the installation of large data centers. According to the projects authorized by the National Electric Energy Agency (ANEEL) and growth forecasts for MMGD released by the Energy Research Company (EPE), the Northeast is expected to incorporate an additional 79.7 GW of large-scale solar capacity, 21.8 GW of wind capacity, and 6.0 GW of MMGD in the coming years.

These additional investments are estimated at around R$ 433 billion.

This expansion will solidify the Northeast as the leading center for renewable energy in Brazil, playing a crucial role in decarbonizing the national electrical matrix.

To ensure continued success and effectiveness of these investments, it will be essential to implement appropriate infrastructures to support the growth of renewable energy generation. This includes expanding the transmission network to facilitate energy transport and implementing energy storage systems to manage the intermittency of solar and wind sources.

Furthermore, the region must continue to receive support and incentives through public policies that promote innovation and efficiency in the energy sector. Regulatory oversight, transparency in licensing processes, and adaptation of regulations are crucial to sustain the rapid growth pace and ensure that the Northeast remains a model of success in clean energy generation.

With these coordinated efforts, the Northeast will establish itself as a global example of a successful energy transition, standing out not only for its capacity to generate renewable energy on a large scale but also for its contribution to a sustainable and decarbonized energy future.