Brazil provides a good system for being a carbon neutral energy
system. The growth in the Brazilian power market is expected to be immense
during the forecast period. This growth shall be tapped by many companies which
might lead to huge competition in the field of power generation in Brazil.
According to the study, ‘Brazil
Power Market Outlook To 2030, Update 2018 - Market Trends, Regulations And Competitive Landscape’, some of
the major companies that are currently operating in the Brazilian power
generation industry include CentraisEletricasBrasileiras S.A.,
EngieBrasilEnergia SA, PetroleoBrasileiro SA, CompanhiaEnergetica de Minas
Gerais SA, CompanhiaParanaense de Energia SA. The companies currently hold
majority of the market share under their hood which makes the market slightly
consolidated. Even though hydro is the most popular source, studies suggest
that the cost of producing electricity in Brazil via hydro projects is
expensive as compared to generation via wind which makes wind a profitable option
for companies to explore.
The electric power generation in Brazil is regulated by the
Brazilian Electricity Regulatory Agency which is an independent body that was
setup in 1992 to work as a regulatory authority over matters concerning power
generation. Renewable sources of energy are abundantly present in the country
which makes it only one of the few countries to have majority of its power
generation from renewable sources of energy. Majority of the electricity
generation in Brazil takes place from the Hydrological sources due to abundance
of rivers. Not only this, but Brazil has abundance of bio energy sources of
power creation. Brazil is recently also gaining popularity with the wind and
solar modes of energy creation. Brazil as a country has plenty of renewable
sources of energy with the potential to explore many more. Brazil is only one
of the few countries that currently has majority of its energy dependence on
renewable forms which would prove to be one of the biggest asset in the coming
years which are characterized by falling quantity of fossil fuels.
The high percentage of electricity generation by renewable sources
of energy implies a significantly lower share of power generation via coal or
oil resources thereby showcasing a slower growth in these sectors. On the other
hand, Gas as a source of energy generation is picking up space. Gas although
has a small share, but it is rapidly picking up pace. The growth rate of gas as
a source of energy generation is doubling itself year on year making it one of
the fastest growing energy sources.
In Brazil, renewable forms have energy have the majority share in
production. Within the renewable sources, the market is currently led by hydro
projects however, looking at the growth rate of Gas as a source of energy production;
it could change the market dynamics completely. The
competition in this industry is characterized by huge capital investments and stiff
competition with only a few companies holding a significant share of the market
which makes the entry of new players very difficult. The companies that look
forward to entry into the Brazilian power industry need to provide
uninterrupted electricity using cheapest source in order to gain some significance
in the overall industry.
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