Brazil - Commercial Guide
Energy

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2019-10-13

Overview 
In the Brazilian Energy Expansion Plan (PDE) for 2024, published by the Brazilian Ministry of Mines and Energy (MME), the Brazilian energy matrix shows that renewable sources will maintain a high share of 45 percent in 2024, compared with the 39 percent observed in 2014. The aggregate “other sources” (wind, biodiesel, solar, and black-liquor) will contribute to the growth of renewables followed by hydro energy and sugar cane products. In fossil fuels, oil and gas will reduce their participation, and coal will increase slightly. Nuclear energy is expected to grow due to the entry into operation of the Angra 3 power plant.  
 

Domestic Energy Supply (% and TOE) 

Year

Oil
Natural Gas
Coal

Nuclear

Hydro
Firewood and Charcoal Sugar Cane Products
Others

Total
2014  39.4%  13.5%  5.7%  1.3%  11.5%  8.1%  15.7%  4.7%  Million toe: 305.6 
% renewable: 39.4 
2024  34.3%  11.8%  5.8%  1.7%  13.3%  6.9%  16.9%  8.8%  Million toe: 399.5 
% renewable: 45.2 


Source: MME

Total Primary Energy Consumption in Brazil by Fuel Type 
Petroleum and other Liquids  Hydroelectric Power  Natural Gas  Renewables  Coal  Nuclear Energy 
46%  28%  11%  8%  6%  1% 

Source: BP Statistical Review of Energy 2018. 

Leading Sub-Sectors 
Oil and Gas 
Brazil is the largest oil producer in South America, the ninth largest global oil producer, seventh largest oil consumer, and has the largest recoverable ultra-deep (pre-salt) oil reserves in the world.Brazils oil production is predominantly offshore (94 percent). Significant energy reforms, frequent oil finds, along with recent and future oil bidding rounds have been attracting International Oil Companies (IOCs) from around the world to bid on opportunities in Brazil. Additionally, there is an increased potential for U.S. exports of equipment and services,with lower local content requirements, plus new investments in exploration, production, and refining by Brazil’s national oil company Petrobras and others estimated at $100 billion over the next several years. 

Nuclear 
Brazil has a promising civil nuclear energy market. The country’s two nuclear reactors supply nearly two percent of Brazil’s energy.  Government-owned Eletronuclear (ETN) has recently approved its investment plan of R$13.8 billion (approximately $4 billion) for the 2019-2023 period.  The conclusion of the third nuclear power reactor is pending availability of financial sources and a new business model to allow private sector participation.  The new Brazilian Minister of Mines and Energy has recently announced that the 2050 Long-Term Energy Expansion Plan, currently under draft, may include between four to eight new nuclear power plants. 

Electric Power Systems 
Brazil is the largest electricity market in Latin America. Brazil generates and distributes more electricity (to over 79 million residential, commercial, and industrial consumers) than all the power produced in its South American neighbors combined. Electricity load growth in Brazil is about 5 percent per year, so the country must integrate about 4 GW of new generation power capacity every year to keep up with the load growth. According to MME, electricity demand is expected to increase at 4.2 percent per year until 2024, which will demand the addition of 79 GW of installed total generation capacity (41 GW already contracted), 70,000 km of transmission lines and 163 GVA in substations. To fulfill this plan will require investments of around $142 billion. 
 

Generation: Brazil has a total of 160 GW in installed capacity, of which 77 percent is from renewable resources, mainly hydropower. Natural gas and biomass represent 9 percent each, while nuclear accounts for nearly 2 percent. According to MME, installed power generation capacity is expected to reach 212 GW by 2024 and it will require around $101 billion in investments. 
 
Transmission: Brazil has a country-wide interconnected grid of 130,000 km of high voltage transmission lines. Fifty percent of the power transmission companies in Brazil are privately-owned. International groups, such as Sterlite Power from India and State Grid from China, have been actively growing their presence in this segment by winning several auctions for new transmission lines. According to the MME, approximately $41 billion will be invested in transmission until 2024. 

Web Resources 
Brazilian Wind Power Association
(ABEEOLICA)

Brazilian Energy Efficiency Association(ABESCO)
Brazilian Association of Electric Power Distribution Companies (ABRADEE)
Brazilian Association of Large Electric Power Generation Companies (ABRAGE)
Brazilian Association of Large Electric Power Transmission Companies (ABRATE)
Brazilian Solar Power Association (ABSOLAR)
Brazilian Association of Independent Power Producers (APINE)
Brazilian Cogeneration Association (COGEN)
The Brazilian Petroleum Institute (IBP)
Brazilian Association of Oil Service Companies (ABESPETRO)
Brazilian Machinery and Equipment Association(ABIMAQ)
Brazilian Association of Independent Oil and Gas Producers (ABPIP)
Brazilian Association  of Fuel Distribution Companies(BRASILCOM)
Brazilian Association of Nuclear Power Development (ABDAN)
Brazilian Nuclear Power Association (ABEN)

Customer engagement solutions  Smart metering: smart grid software and analytical packages; advanced metering infrastructure  Electric vehicle infrastructure  Disruptive, emerging and innovative technologies: Blockchain, vehicle-to-grid, off-grid, PV + storage  Energy storage Distributed energy resources management and control  Transmission and distribution automation  Enterprise grid management Cybersecurity and incident response solutions  High efficiency turbines capable of integrating with renewable resources  Rehabilitation/repair/maintenance/upgrading services Weather instruments and meteorological equipment  Microgrid solutions  Residential, commercial and industrial energy efficiency solutions  Control and automation systems Data loggers and acquisition systems Monitoring/testing/inspection systems  Remotely operated vehicles  Digital power plants U.S. nuclear power equipment and service suppliers can check ETN’s website for tender announcements, registration and information. 

Electric Power Systems and Renewable Energy 
Data analytics Components: Moderate opportunities to supply existing plants, one of which was built by  Westinghouse, with engineering support, fuel components, waste handling systems and related materials.

Renewable Energy 
Brazil generates 77 percent of its electricity from renewable resources. Brazil’s commitment to renewable energy is strong and continued investment is expected in wind, solar, and hydropower capacity growth in the future. 

Brazil uses auction-based renewable procurement to increase new generation capacity. By  contracting via electricity auctions, Brazil can ensure renewable development in Brazil. Contracts have durations between 15 and 30 years. 

Hydropower represents 63 percent of the Brazilian electricity matrix. Hydropower generation is complementary to other renewable resources in Brazil, allowing for hydro reservoirs along with the countrywide transmission grid used to modulate and integrate seasonal and intermittent power generation from other renewables.   

Wind power is the second largest source of energy in Brazil with 15 GW of installed capacity, besides an additional 4.6 GW, already contracted or under construction, to come online by 2023. Brazil has 601 wind farms using 7,000 wind turbines. 

New solar energy developments over the long term could potentially rival investments in wind power. Solar energy already accounts for 2.1 GW in installed capacity in Brazil and should reach 3.7 GW by 2022. Investments in utility-scale solar energy projects, already contracted in the energy auctions, will reach over U.S. $5 billion by 2022.  U.S. $1 billion  has have been invested in solar distributed generation since 2012, and this amount is expected to increase exponentially in the next few years. 

Opportunities
Every year, the MME publishes an expansion plan (PDE) that presents, for the perdio of the next ten years, the results of prospective studies of energy demand and supply, and related projects such as electricity generation power plants, transmission lines, oil refineries, oil exploration blocks, oil and gas pipelines, and bioenergy production facilities. The planned investments through 2024 are shown on the table below: 

 

Total Investments on Energy Expansion 
Sector  Billion $ (*) 2014-2024 %
Electricity  142 27
Generation 
101 19
Transmission 
41 8
Oil and Gas  375 71
Biofuels  14 3
Total  531 100
% of the accumulated GDP in the period    3
% of the accumulated GFCF in the period    14
(*) The exchange rate adopted is R$/$2.7     

Source: MME
Oil & Gas 
Aside from Petrobras, which accounts for 92 percent of Brazil’s oil and gas production, and will invest $84.1 billion from 2019 to 2023, another 47 local and 50 foreign companies hold oil rights to exploration and appraisal areas in Brazil (aka “blocks"), representing additional opportunities for U.S. companies.  According to the Brazilian National Oil and Gas Regulator (ANP) databank,  ANP has granted 1005 oil exploration blocks to oil companies, including Petrobras, during the oil licensing concession rounds, held from 1999 to 2018.  Another 28 blocks have been granted to oil companies, including Petrobras, under a production sharing agreement (PSA) regime, at the 2017 and 2018 PSA licensing rounds for pre-salt fields.  Global energy giants like Shell, Equinor, Chevron, Murphy Oil and Exxon are among the foreign oil companies with assets in Brazil.  Together, the oil companies plan to drill 300 offshore wells, order 17 new production units, and build 600 km (373 miles) of gas pipelines in Brazil. The major oil companies, including Petrobras, will also invest to maximize production and reservoir recovery indexes or levels. Prospects for U.S. companies include: well services, including intelligent well completion services; FPSOs and rig leasing; EPC, EPCI, project design and revamp; subsea systems (including power transmission and distribution), autonomous subsea inspections (to reduce human diving interventions), oil rig decommissioning (including well plugging through heat emissions); valves, tubing, fittings, and static equipment; HSE (offshore emergency response solutions and safety supervisory systems, IT and cybersecurity, geophysical (including reservoir appraisal strategy optimization); chemicals and catalysts, as well as logistics. 
U.S. companies can also look to purchase assets that  Petrobras is looking to sell under its ongoing divestment program. They include upstream offshore and onshore oil fields as well as downstream facilities. Opportunities also exist for U.S. oil companies to bid during the 2019 to 2021 auctions for oil blocks that ANP will organize.   

In the natural gas segment alone, the Brazilian Piped Gas Association (ABEGAS) estimates that, pending the conclusion of a new gas regulatory framework, the sector may draw investments of about $32 billion over the next ten years, including $5 billion for the construction of new LNG regasification terminals. 

U.S. oil and gas suppliers are encouraged to secure a supplier’s registration to facilitate contracting procedures with Petrobras. Registration requires that foreign firms have a local representative. It is our recommendation that U.S. firms not established in Brazil consider partnering with a local firm that is registered as a supplier to Petrobras rather than attempting to register directly. CS Brazil can assist with making those connections through our Gold Key Service.  

The best combination of price and technical requirements normally prevail in Petrobras tenders, especially for critical types of equipment and services. 


Nuclear Power Sector 
Eletronuclear (ETN), a division of Brazil’s state-owned energy company Eletrobras, will focus primarily on the operation and maintenance of the two existing nuclear power plants and on a new Spent Fuel Dry Storage Facility. ETN is expected to have demand for the following equipment and services: 

  • Safety and other plant upgrades 
  • Plant design modifications 
  • Modernization of instrumentation and controls
  • Licensing support services to Brazil’s nuclear regulator, the National Nuclear Energy Commission
  • Components: Moderate opportunities to supply existing plants, one of which was built by  Westinghouse, with engineering support, fuel components, waste handling systems and related materials.

U.S. nuclear power equipment and service suppliers can check ETN’s website for tender announcements, registration and information. 

Electric Power Systems and Renewable Energy 

  • Data analytics
  • Control and automation systems
  • Data loggers and acquisition systems
  • Monitoring/testing/inspection systems 
  • Remotely operated vehicles 
  • Digital power plants
  • High efficiency turbines capable of integrating with renewable resources 
  • Rehabilitation/repair/maintenance/upgrading services
  • Weather instruments and meteorological equipment 
  • Microgrid solutions 
  • Residential, commercial and industrial energy efficiency solutions 
  • Energy storage
  • Distributed energy resources management and control 
  • Transmission and distribution automation 
  • Enterprise grid management
  • Cybersecurity and incident response solutions 
  • Customer engagement solutions 
  • Smart metering: smart grid software and analytical packages; advanced metering infrastructure 
  • Electric vehicle infrastructure 
  • Disruptive, emerging and innovative technologies: Blockchain, vehicle-to-grid, off-grid, PV + storage 

Web Resources 
Brazilian Wind Power Association (ABEEOLICA)
Brazilian Energy Efficiency Association(ABESCO)
Brazilian Association of Electric Power Distribution Companies (ABRADEE)
Brazilian Association of Large Electric Power Generation Companies (ABRAGE)
Brazilian Association of Large Electric Power Transmission Companies (ABRATE)
Brazilian Solar Power Association (ABSOLAR)
Brazilian Association of Independent Power Producers (APINE)
Brazilian Cogeneration Association (COGEN)
The Brazilian Petroleum Institute (IBP)
Brazilian Association of Oil Service Companies (ABESPETRO)
Brazilian Machinery and Equipment Association(ABIMAQ)
Brazilian Association of Independent Oil and Gas Producers (ABPIP)
Brazilian Association  of Fuel Distribution Companies(BRASILCOM)
Brazilian Association of Nuclear Power Development (ABDAN)
Brazilian Nuclear Power Association (ABEN)