Brazil Energy Curtailment

Brazil’s electricity sector is experiencing a structural rise in renewable energy curtailment, generating material financial losses and driving regulatory and operational change. Curtailment-related losses exceeded approximately USD 300 million in 2024 and USD 370 million in 2025, and Brazil’s National System Operator (ONS) projects that by 2029 up to 96 percent of curtailment will result from structural supply–demand imbalance, rather than transmission constraints. This shift is undermining project bankability and influencing investment decisions and long-term planning for wind and solar generation, particularly in Brazil’s Northeast.

According to GRI Institute Infrastructure roundtable discussions with private-sector stakeholders—including generators, utilities, investors, technology providers, and large energy consumers—curtailment is now widely viewed as a systemic issue that cannot be addressed through grid expansion alone.

In response, ONS has implemented new rules governing grid access and connection priorities to improve transparency and reduce speculative reservation of transmission capacity. Measures include expanded use of public transmission margin and connection availability maps, stricter technical and timing requirements to maintain access requests, and a transition toward seasonal access models for the Basic Grid. Project prioritization is increasingly based on maturity, locational suitability, and contribution to system reliability, rather than order of request alone.

ONS guidance also introduces differentiated treatment for large, energy-intensive loads, including data centers and hydrogen production facilities. These projects are classified as continuous, high-impact consumers and are subject to more detailed access studies and prioritization criteria. For data centers, ONS places growing emphasis on operational flexibility, favoring projects that incorporate load modulation, demand-response capability, on-site generation, or behind-the-meter energy storage—particularly where consumption can be aligned with periods of high renewable output. Projects that increase peak demand without flexibility face heightened scrutiny and longer connection timelines.

For hydrogen projects, grid access evaluations emphasize proximity to surplus renewable generation, electrical interface design, and load ramping characteristics. Facilities located in regions with persistent oversupply, such as parts of the Northeast, are viewed as more system-compatible, especially when designed to absorb excess generation through flexible operation. Projects requiring significant long-distance transmission capacity face tighter access constraints and must demonstrate clear system value to maintain priority.

Together, rising curtailment and evolving grid access rules are accelerating demand for energy storage, grid digitalization, advanced forecasting, and flexible demand solutions, as Brazilian policymakers and utilities seek to balance renewable integration with system reliability. While new load development—particularly data centers and hydrogen—remains a priority, it is increasingly governed by frameworks that reward flexibility and system support.

Opportunities for U.S. Companies
Brazil’s evolving power-sector framework is creating concrete opportunities for U.S. companies supplying technologies and services that enable grid flexibility and operational control. U.S. firms are competitive providers of battery energy storage systems, advanced power electronics and inverters, grid-management and forecasting software, and demand-side and load-management solutions that mitigate curtailment and support compliance with new ONS access and connection requirements. Companies supporting data center and hydrogen project design—particularly through integrated storage, flexible load controls, and hybrid renewable configurations—may find opportunities via exports, partnerships, pilot projects, and utility-led procurements.

For more details, please contact Igly Serafim, igly.serafim@trade.gov, Electricity Infrastructure Commercial Specialist, U.S. Commercial Service, Sao Paulo.
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