Source is only behind hydro power one decade after first projects

01/04/2023

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Strong state policy of incentives for renewable sources also drives growth — Foto: Uwee Westphal/Pixabay

Solar power became the second-largest source in Brazil’s generation mix, only behind hydroelectric plants, from a virtually non-existent installed capacity a decade ago. The source has just topped wind power and hit 23.9 gigawatts, considering large plants and small photovoltaic systems of self-generation on roofs, facades, and small plots of land.

The amount accounts for 11.2% of the country’s power generation mix. Since 2012, investments have totaled R$120.8 billion, according to the Brazilian Solar Energy Association (Absolar). Technological improvement, market evolution in Brazil, cost reduction, and good insolation quality have created ideal conditions for the source to grow.

A strong state policy of incentives for renewable sources also drives growth, according to the Economics of Energy Innovation and System Transition (EEIST) project.

Absolar’s head Rodrigo Sauaia told Valor that Brazil is among the 10 largest markets in the world in this segment and is still gaining ground. “The first solar power contract with the federal government was signed in 2014. Only in 2017 Brazil hit one gigawatt. The first auction of the wind power industry, on the other hand, was held a decade earlier,” said the executive.

Last year was unique in this trajectory: the sector overcame the challenges of exchange rate oscillation, high freight rates, the collapse of China’s supply chains, congestion in ports, inflation caused by high global demand, and the pandemic. Even so, Brazil added 9 GW of power. In the last 150 days alone, the rate of growth has been more than 1 GW per month.

With this, the power generated from photovoltaic panels has been the fastest-growing segment in the electrical sector by associating the growing search for clean and renewable power with the appeal of low cost.

Yet, the solar source is expected to keep growing strongly. Bloomberg projects that the solar source will be the most important in the power generation mix by 2050, surpassing hydroelectric plants, which total 110 GW in operation, according to the Brazilian Electricity Regulatory Agency (Aneel).

“This path can be traced in a more or less agile manner, according to public policies developed and the use of these technologies in government programs,” said Mr. Sauaia.

It is worth pointing out that the solar source is significant in Brazil’s power generation mix because of distributed generation, a type of energy production generated mainly with solar panels near consumers with a limit of up to 5 MW.

Guilherme Chrispim, head of the Brazilian Association of Distributed Generation (ABGD), recalled that in this historical context, wind power took longer to reach the same level. Furthermore, the growth of solar was key for the social, economic, and environmental development of Brazil, at a time when the consumer became more empowered, including with the option to generate their own energy.

“Distributed generation for small consumers made solar power the second-largest source in Brazil’s generation mix,” he said. “This shows democratization in this source. Plus, there is no lack of sunny areas in Brazil.”

Not surprisingly, distributed generation is the model that added the most power in the system – 7.7 GW, compared to 4.6 GW in 2021 – and is expected to be the source that will inject the most capacity in the system.

Absolar forecasts that the source will add more 10 gigawatts of capacity in the electrical system this year, raising the total to 34 GW. Of this amount, 21.6 GW will come from small and medium-sized systems installed by consumers in homes, small businesses, rural properties, and public buildings.

The sector’s path is still long. Technological development is a challenge since a good part of the solar panels installed in residences has low efficiency. The crystalline silicon cells had 13% efficiency 10 years ago, compared with up to 26% now. As technology advances, costs are falling.

“As of 2020, solar power is the generation source with the best cost-benefit ratio in places where more than 60% of the world’s population lives. Cheaper than coal-fired, wind-fired, and hydro sources,” said Mr. Sauaia when referring to large power plants. According to the International Energy Agency’s forecast, the source is expected to surpass power production from coal by 2027.

Smaller solar systems have also seen their costs reduced. A study by consultancy Greener with companies in the sector found that, in Brazil, a residential photovoltaic system that cost an average of R$35,000 in 2016 can currently be purchased for R$19,500.

Even with the substantial drop in equipment prices, it is still expensive for low-income households. Camila Ramos, director and founder of the consultancy Clean Energy Latin America (Cela), stressed that even with the high interest rates in Brazil, the demand for financing solar panels has increased because of the growing rise in electricity bills in recent years.

According to the executive, the segment’s financing lines have increased in the last year. The sector calls for more access to credit in social programs to bring this technology to the whole society in a more democratic way.

The source’s growth is not restricted to Brazil. The whole world has been advancing at a record pace, not only because countries are driving the expansion of renewable power, but also to achieve their climate and energy security goals. China, for example, has more than 306 GW. The United States is at more than 123 GW, according to 2021 data. Compared to some countries, Brazil is still taking its first steps.

*By Robson Rodrigues — São Paulo

Source: Valor International

https://valorinternational.globo.com/