Summary
Over the last decade, Brazil’s power sector has experienced a rapid expansion of variable renewable energy (VRE), particularly wind and solar photovoltaic generation, alongside the growth of distributed generation (DG). Driven by regulatory incentives and declining technology costs, this expansion has been largely supported by the liberalized bilateral market rather than centralized planning, introducing new challenges for system operation, market efficiency, and investment signals.
Read more Read lessThis paper analyzes the market and regulatory impacts of the recent growth of wind and solar generation in Brazil, with a focus on price signals, curtailment, and commercialization risks.
Aligned with Preferential Subject 1 (PS1), the study examines how the current market design responds to increasing penetration of intermittent generation, highlighting the differentiation in the economic value of energy delivered across technologies, times, and locations.
The analysis is based on hourly operational and market data from January 2021 to October 2025, following the implementation of the hourly wholesale spot price (PLD).
Commercialization risks for hydropower, wind, and solar generators are quantified through modulation, seasonalization, submarket price, and curtailment risks, assuming flat bilateral contracts and considering the evolution of the “I5” incentive spread.
The results show a deterioration in generation performance relative to granted firm energy (FE), particularly for wind and solar assets, driven by increasing curtailment. Concentration of VRE in the Northeast submarket and limited transmission expansion have intensified price separation and intraday price cannibalization. The findings underscore the strategic role of hydropower flexibility in high-VRE systems and reinforce the need for market and regulatory reforms that explicitly value flexibility and capacity attributes.
Additional informations
| Publication type | Session Materials |
|---|---|
| Reference | C5_11295_2026 |
| Publication year | |
| Publisher | CIGRE |
| Country | Brazil |
| Study committees | |
| File size | 895 KB |
| Price for non member | 30 € |
| Price for member | 30 € |
Authors
DE CAMARGO Guilherme Torres - Simple Energy Brazil; DORNELLAS Carlos Rubens Rafael - ALMA SOLAR Energia Brazil; ASANO JUNIOR Roberto - Universidade Federal do ABC Brazil; ASANO Patrícia Teixeira Leite - Universidade Federal do ABC Brazil
Keywords
