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Brazil has rapidly expanded its renewable energy capacity, adding nearly 12GW of solar power in 2025, with solar constituting almost 25% of its electricity matrix. Distributed solar generation surged from under 1GW in 2018 to 43.5GW by 2025, with projections estimating 64GW by 2029.

However, this growth has led to operational challenges, including a 20% curtailment of available solar and wind energy in the previous year, resulting in losses exceeding $6 billion. The Brazilian Government is implementing reforms to modernize the power sector, including a BESS auction scheduled for April 2026, aimed at increasing efficiency.

The auction is expected to attract significant investment, with potential returns of $70 billion by 2034. Additionally, the government plans to hold reserve power auctions and address transmission bottlenecks, with two transmission auctions expected to mobilize investments of $25.7 billion for new lines across multiple states.