The Brazilian energy matrix has always been one of the most sustainable in the world.
According to the latest information available (source ANEEL – National Electricity Agency), Brazil has a production capacity of approximately 174,883.1 MW. Of this total in operation, 74.92% of the plants are powered by sources deemed sustainable, low greenhouse gas emissions.
– Large hydroelectric plants: 58.34%
– Small and mini hydroelectric power plants: 3.59%
– Wind farms: 10.0%
– Photovoltaic plants: 1.87%
– Thermonuclear power plants: 1.12%
– Thermoelectric plants: 25.08%
In recent years there has been a great growth in wind farms, which began only in 2002, thanks to the PROINFA program (Program of Incentive for Alternative Sources of Electricity).
Today wind production stands at 17 GW (produced by 699 plants), but it has been estimated that it could potentially reach 140 GW.
But things are also starting to change in Brazil and solar energy is expanding very rapidly. At the latest auction for energy production concessions, organized by ANEEL, 67% of the 1824 projects presented are photovoltaic generation (70% in terms of energy produced, about 52 GW). The auction (called Leilao-4) will take place in May 2022 and foresees the entry into operation of the winning plants by 2026.
And the reason for this strong growth is there: Brazil receives more than 3000 hours of solar radiation (number of hours of sunshine) per year and in the north-eastern region there is an average daily incidence of between 4.5 and 6 kWh. It is the country with the highest rate of solar radiation in the world.
Why this leap in solar energy in Brazil?
Three factors help to understand why solar energy is becoming the protagonist in the national supply.
The first is the cost of solar energy. In a decade the value of photovoltaic production has collapsed and today competes with that of wind and hydroelectric plants. The cost of one MW/hour of solar energy went from US$ 103 in 2013 to US$ 31 in 2021.
The second factor concerns the advancement of technology. Today a photovoltaic park is being built with half the investment that would have been necessary five years ago: the efficiency of the new equipment has increased and today it provides on average 30% more energy than the existing structures five years ago. Installation times are also significantly reduced compared to a hydroelectric project, as a photovoltaic plant can become operational in one and a half / two years.
A third aspect that favors the expansion of photovoltaics is the incidence of sunshine in the country, present with strong intensity and constantly in much of the Brazilian territory. Unlike wind farms and hydroelectric plants, which require particular climatic and hydrogeological conditions, in Brazil the irradiation necessary for the operation of a photovoltaic system can be ensured in a very widespread and continuous manner.
The solar energy market in Brazil
Today we can consider that the photovoltaic market is divided into three main segments:
– distributed market, i.e. the self-production of energy for residential environments and small businesses, in order to reduce electricity costs.
– regulated market, production and sale of generation to energy distributors (referred to in the auction of May 2022, the Leilao A-4).
– free market, which should concentrate a large part of the projects in the coming years, in which large industries – such as the high energy consumption sectors, such as steel and cement – purchase energy directly from generators, in direct and long-term contracts term, without going through the distributors.
There are 7,157 photovoltaic plants in operation today, with a total power of 7.9 GW. Still very little, but the forecast is that the share of solar in the Brazilian energy matrix will advance by leaps and bounds in the coming years, as has happened in the past with wind farms.
The states that concentrate the greatest number of projects are obviously the sunniest ones in Brazil: Minas Gerais, Bahia, Piaui, Rio Grande do Norte, Pernambuco, Ceara ‘and Goias.
Law 14300/2022: the new legal framework for distributed generation
Following the publication of the 14,300 law, many Brazilian companies predict a “hotter” solar market for 2022 and are purchasing equipment to meet their customers’ expectations and maintain a good level of inventories.
According to Leandro Martins, president of Ecori Energia Solar, the expectation is that the national market will grow by about 150% in 2022 compared to 2021.
Roberto Caurim, CEO of Bluesun, believes that the growth expected for the sector this year is due to a combination of factors: the new legal framework and the cost of energy, which tends to continue growing in 2022.
Official text of law 14300/2022 at the link: https://in.gov.br/en/web/dou/-/lei-n-14.300-de-6-de-janeiro-de-2022-372467821
The knot of the supply chain
In 2022, the biggest limitation to PV expansion will be the availability of module components, largely imported.
Instability in the supply chain (which has also occurred in other sectors, such as the automotive sector) is expected to continue during the first half of 2022, making monitoring of the entire production chain of solar photovoltaic modules essential.
While China has announced investments to increase the production capacity of components (cells, glass, encapsulants, etc.), on the other hand this strong dependence on China and other Southeast Asian countries is pushing towards openness of factories in other regions of the world, such as Europe and the USA.
Production and inventory estimates for solar module components have triggered some price reductions in early 2022, but still on a preliminary basis and without indicating a solid trend for the next few months.
Standardizing module sizes can help simplify and reduce costs in wafer and cell production chains, making it necessary for industry to adopt standards in the manufacturing stages of these components.
Furthermore, in 2022 we should see the popularization of new solar module technologies, with a growth in the application of TopCon Type N and HJT (Heterojunction) cells, with higher efficiency and less degradation effect.