Arthur Deakin, co-director of AMI’s energy practice, explained for Latinvex how new legislation and privatizations will unlock investment opportunities in Brazil.
Brazil’s energy market remains highly fragmented due to its unique set of rules for its different types of consumers. Depending on the amount, the type of energy, and the setting in which they consume electricity, consumers can fall into the following five categories: free, special, distributed, self-generating and regulated. A more unified set of rules for consumers would encourage price transparency and grid predictability in Brazil.
Despite the challenges, there are unique pockets of opportunity within Brazil’s energy sector that remain highly attractive and lucrative. A key prospect is the Distributed Generation subsegment, where companies and homes use solar panels to generate decentralized power of up to 5 MW. Following the approval of a net-metering bill in 2012, the segment has attracted $3.5 billion in investments. By 2030, if subsidies are maintained, Brazil’s distributed generation capacity will increase six-fold and will attract an additional $13.5 billion in capital investments.
You can read the full analysis here.