2025
Global Power Transmission Report
Regional Market Overviews
Brazil
GDP (Current Prices) USD (2023) | 2,174 Bn |
Projected Average GDP Growth (2024-2028) | 2.5% |
10-year Govt Bond Yield (12-month rolling average) | 11.7% |
Country Credit Rating | BB |
Renewable Energy Share | 29% |
Total Transmission Line Length (Km) | 184,000 |
Note: Renewable Energy Share excludes hydropower
Transmission Network
The Brazilian power system comprises four interconnected regional subsystems: South, Southeast-Midwest, North, and Northeast. These regional subsystems constitute 98% of the power market. The remaining part comprises isolated power systems in regions including Amazonas, Roraima, Acre, Amapá, Rondônia, and part of Pará (ReGlobal, 2024). Multiple privately owned transmission companies manage and operate the network based on the respective concession contract terms. Electrobrás and ISA CTEEP (Companhia de Transmissão de Energia Elétrica Paulista) are among the predominant transmission utilities. There is significant foreign investment in the industry. A notable one is that of the Chinese transmission system operator, State Grid Corporation, which operates major high-voltage direct current (HVDC) network segments in the Brazilian power system.
Over three-quarters of the transmission line length is concentrated at voltage ratings of 230kV and 500kV. A major area of focus is the long-distance HVDC-based transmission segments to enable the offtake from the remotely located renewable-rich locations. The auction-based independent transmission model has helped drive the investments. During the period 2018-2023, the line length grew at a compound annual growth rate (CAGR) of 4.4%. The pipeline continues to grow, with several HVDC lines in the works.
Transmission Network Growth
Note: Data for 2023 is as of November
Source: REGlobal
Cross-border Transmission Linkage
| Country Linkage | About the Linkage |
|---|---|
| Brazil-Paraguay | With an installed capacity of 14GW, the Itaipu Hydroelectric Dam is operated by Itaipu Binacional on the Brazil-Paraguay border. It meets the energy demands of both countries, with 90% serving Brazil. |
| Brazil-Argentina | The Garabi HVDC converter station enables power exchange between Brazil and Argentina, interconnecting their asynchronous grids (50 Hz in Argentina and 60 Hz in Brazil) with a transmission capacity of up to 2,200 MW |
| Brazil-Uruguay (Two links) | The Rivera HVDC back-to-back station facilitates energy exchange between Brazil and Uruguay, converting frequencies between the two countries’ grids with a transmission rate of 70MW. Established in 2016 with a 50/60 Hz back-to-back frequency converter in Melo, Uruguay. Situated northeast of Uruguay, the converter facility will allow Uruguay to trade energy with Brazil, increasing the flexibility and reliability of grid networks in both countries. |
| Brazil-Venezuela | A cross-border link from Venezuela’s Guri hydropower complex supplies electricity to Boa Vista in Brazil, integrating the northern Brazilian region with Venezuela’s power grid. |
Drivers in Energy Transition
Brazil’s overarching policy targets on emission control set the agenda for energy transition in power, among other economic sectors. In November 2023, the Brazilian government signed a global agreement to triple renewable energy capacity by 2030 (Reuters, 2023). The commitment can be seen extending to the recent policy goal and commitment to reduce emissions by 59% – 67% by 2035, compared to the 2005 levels (WRI, 2024). Power sector decarbonisation will be among the key routes to achieve the targeted emission reduction.
The country’s generation mix is skewed in favour of clean or low-carbon energy resources – over 90% of the grid-connected supply is based on hydropower, renewable energy and nuclear energy. With such a base, the country is already ahead of several G20 countries in clean energy- based power (including large-scale hydropower). A notable aspect is the rising importance of renewable energy (wind and solar) vis-à-vis hydropower, the latter being subject to drastic fluctuations from drought or poor rainfall conditions. The capacity addition rate illustrates this. During 2018-2023, renewable power capacities grew at a CAGR of 7.3%. Hydropower capacities grew at just 1% during the same period (IRENA, 2024).
Policy Regulation
Brazil’s electricity transmission sector has effectively attracted private investment through a well-structured regulatory framework. The Ministry of Mines and Energy (MME) and the Agência Nacional de Energia Elétrica (ANEEL) oversee public auctions for transmission projects, granting concessions to private entities. These auctions have fostered a competitive environment, leading to significant private- sector participation. Notably, over the past two decades, approximately 250 companies have engaged in 350 Independent Power Transmission (IPT) projects, indicating a robust and dynamic market (International Trade Administration, 2023) (IEA, n.d.).
A key component of this framework is the regulated Weighted Average Cost of Capital (WACC), periodically adjusted by the regulator to reflect macroeconomic conditions. This approach provides investors with predictable returns, reducing perceived risks and enhancing investment appeal. The IPT model, in particular, sets revenue caps based on competitive auction outcomes, incentivising efficiency and cost-effectiveness. The success of this model is evident in the consistent negotiation of auctioned lots post-2017, demonstrating sustained investor confidence.
Additionally, the Brazilian Development Bank (BNDES) has played a pivotal role in mobilising private capital. While its share in financing transmission and distribution projects has declined, indicating a maturing market, BNDES continues to support significant initiatives. For instance, in 2022, it financed Neoenergia with US$270 million in funding for a 1,100 km transmission line, marking the country’s first certified Green Loan (IEA, n.d.).
The rising trend in WACC between 2013 and 2023 reflects changes in investor return expectations and potential adjustments in the regulatory framework. The divergence between the WACC and the risk-free premium indicated a balance between regulatory interventions and market dynamics, highlighting the effectiveness of Brazil’s regulatory mechanisms in maintaining investment appeal in the transmission sector while managing systemic risks (IEA, n.d.).
Market Opportunity
The roadmap for expanding the power transmission network capacity is outlined in the government-commissioned publication titled “Plano Decenal de Expansão de Energia 2032” (PDE). It seeks a strategic approach to modernising the grid while augmenting the capacity for the upcoming generation units. Distributed Generation holds the largest share of the upcoming power generation capacity in Brazil. The transmission network must effectively integrate renewable and decentralised energy resources.
Investment commitments point to a rise in spending relative to historical levels. Between 2020 and 2023, transmission network spending declined from $5.7 billion to $3.5 billion. The projections for 2024-2026 suggest a recovery in the spending levels (BNEF, 2024), presenting an optimistic picture of the emerging network requirements. Some of the critical capacity gaps lie in connecting the wind and solar power of the northeastern region with the load centres of the southeastern region.
Estimated Transmission Grid Spend
| Year | Spend ($ billion, real 2023) |
|---|---|
| 2024 | 3.4 |
| 2025 | 4.6 |
| 2026 | 5.1 |
Note: Data of 2024 is as of September 2024
Source: CFE
Transmission Projects under Development
| Project | Voltage | Length | Cost (USD millions) | Scheduled Completion |
|---|---|---|---|---|
| 500 kV Buritizeiro 3–São Gotardo do Pará 2 C1, 500 kV Pirapora 2–Buritizeiro 3 C1 and C2 lines; 500 kV Jaguara–Estreito C2 line; 500 kV Presidente Juscelino–Vespasiano 2 C1 and C2 lines; 500 kV Itabirito 2–Santos Dumont 2 and associated transmission network project | 500/345 kV AC | 1,083.8 km (500 kV–961.2 km; and 345 kV–122.6 km) | 713.30 | 2027 |
| 500 kV Arinos 2–Paracatu 4, C1 and C2 lines; 500 kV Paracatu 4–Nova Ponte 3, C1 and C2 lines; 500 kV Nova Ponte 3–Araraquara 2, C1 and C2 lines; 440 kV Araraquara 2– Araraquara line and associated transmission network project | 500/440 kV AC | 1,707 km (500 kV–1,696 km and 440 kV–11 km) | 956.69 | 2027 |
| 500 kV Morro do Chapéu II–Poções III C1 line and associated transmission network project | 500 kV and 230 kV AC | 1,031 km (500 kV–971 km; 230 kV–60 km) | 462.75 | 2026 |
| 500 kV Quixadá–Crateús C1; Crateús– Teresina IV C1; Teresina IV–Graça Aranha C1; Boa Esperança–Graça Aranha C1; Curral Novo do Piauí II–São João do Piauí II, C1; São João do Piauí–Ribeiro Gonçalves, C3; Ribeiro Gonçalves–Colinas, C3; Morada Nova– Pacatuba, C1 lines and associated network project | 500 kV AC | 1,901 | NA | 2029/30 |
| 500 kV Bom Nome II-Zebu III, C1; Garanhuns II-Messias, C1; João Pessoa II-Pau Ferro, C1; Ceará Mirim II-João Pessoa II C1; Bom Nome II-Campo Formoso II C1, Zebu III-Olindina C1 lines and associated network project | 500 kV AC | 1,113 | NA | 2029/30 |
| 500 kV Juazeiro III-Campo Formoso II C1 line; Campo Formoso II-Barra II C1 line; 500 kV Buritirama-Barra II C1 line; 500 kV Barra II- Correntina C1 line; 500 kV Correntina-Arinos 2 C1 and associated network project | 500 kV AC | 1,116 | 612.73 | 2028/29 |
| 500 kV Gentio do Ouro II-Bom Jesus da Lapa II C2 and C3 lines; 500 kV Bom Jesus da Lapa II-Jaíba C1 and C2 lines; and 500 kV Jaíba- Buritizeiro 3 C1 and C2 lines projects | 500 kV AC | 1,610 | 841.97 | 2028/29 |
| 500 kV Morro do Chapéu II-Poções III; 500 kV Poções III- Medeiros Neto II; 500 kV Medeiros Neto II-João Neiva 2; and 500 kV João Neiva 2-Viana 2 lines project | 500 kV AC | 1,006 | 520.49 | 2028 |
| ±800 kV Graça Aranha-Silvânia DC transmission line; 500 kV Presidente Dutra- Graça Aranha C3 line, and associated transmission network project | ±800/500 kV HVDC | 1,517 km (±800 kV–1,468 km and 500 kV–49 km) | 3,081.10 | 2029/30 |
| 500 kV Ourolândia II-Jussiape C1 and C2 lines; 500 kV Jussiape- São João do Paraíso C1 and C2 lines; 500 kV São João do Paraíso Capelinha 3 C1 line; 500 kV São João do Paraíso-Padre Paraíso 2 C1 line; 500 kV Capelinha 3-Itabira 5 C1 line; 500 kV Padre Paraíso 2-Mutum C1 line; and 500 kV São João do Paraíso substation project | 500 kV AC | 2,090 | NA | 2030 |
Outlook
The projections in the PDE point to a requirement for 41,460 km of new transmission build by 2032. Almost 70% of them are at 500kV or above in voltage ratings due to the need for long-distance and efficient connectivity of renewable power projects. PDE’s network expansion projections amount to BRL158 billion in investment, covering both near-term and long-term infrastructure demand.
Persistent curtailments can dissuade investors from commitments. There are already some signs in this regard, as operational projects face losses. Without mitigating steps, the transmission capacity constraint could aggravate the industry’s problems. Grid reinforcements, upgrades, and technology enhancements are some of the key areas for short-run implementation alongside the priority longer-term projects. 144 | Power Transmission
The 24-year old Brazil-Argentina HVDC link, for instance, was contracted for an asset upgrade in September 2023 to enable better availability and reliability in the cross-border power transactions (Hitachi, 2023). Similarly, the transmission utility Electrobras contracted Siemens for a $200 million grid upgrade project for completion by 2026 (Reuters, 2023). Many more such projects might be needed to ensure readiness for the rapidly growing infrastructure demand. Grid- scale energy storage and policy interventions to expedite grid reinforcement / expansion projects in certain regions are among the other proactive measures to help sustain the growth momentum.
The transformation of the Brazilian power system, in keeping with the integration of renewable energy, will necessarily be a gradual transitory phase. The capacity, however, must be available in time for the huge investments in renewable energy generation in the grid.