Brazil’s energy sector in numbers

and . Aug 29, 2018
brazil energy sector

Understanding Brazil’s energy sector is crucial to comprehending the country’s political environment. Many of the major scandals in recent years have been connected to the energy industry, and its development over time is inextricably linked to the country’s fortunes. We have analyzed several aspects of Brazil’s energy sector in order to unpack this important facet of the country’s economy.

In general terms, Brazil’s energy consumption has increased significantly over the last 14 years, by almost 50 percent since 2004. Going back even further, the country now produces over twice the amount of energy it did in 2001, when Brazil was rocked by a wave of forced blackouts as a result of poor planning in the energy sector.

This increase has been far more pronounced in the country’s North and Centre-West regions (see the graph below), with the state of Tocantins alone registering a jump of over 180 percent in its energy consumption since 2004.  

brazil energy sector consumption 2004 2018

brazil energy sector consumption 2004 2018

These figures can be explained by the vast economic growth experienced in Brazil over the 2000s, largely under the administrations of former President Luiz Inácio Lula da Silva (2003-2010). Increased energy consumption in the North and Center-West has a direct correlation to the growth of GDP in these regions. Across a similar time period (2002-2014), data from IBGE shows the North and Center-West as the two regions whose economies have grown the most in Brazil, by 78 and 70 percent, respectively.

It is interesting to note that while the country’s richest states of São Paulo, Rio de Janeiro, and Minas Gerais are among those to have increased their consumption below the national average, energy used in the northeastern state of Maranhão has actually decreased since 2004.

brazil energy sector consumption 2004 2018

One possible explanation for this is tied to a decrease in the proportion of energy being consumed by industry across the whole of the Northeast region. In Maranhão specifically, two major metalworking plants, Alcoa and Alumar, closed their operations in the state in 2015. Industry as a whole accounted for 45 percent of energy consumed in the Northeast in 2004, but only 27 percent in 2018.

brazil energy sector consumption 2004 2018

Water shortages cause hydroelectric power to decrease

With regard to the sources of energy produced in the country over the last decade and a half, we have seen a significant drop in the generation of hydroelectric energy since 2014, which has been matched by an increase in the production of energy from fossil fuels. This can be explained by the severe water crises which hit the Southeast between 2014 and 2016, and equally critical droughts in the Northeast.

brazil energy sector consumption 2004 2018

We have also seen a sharp increase in renewable energy generation, particularly solar and wind energy. Brazil’s wind power capacity was near non-existent in the early 2000s, but the country is now the 8th largest producer of this particular energy source in the world.

In Brazil, diesel trumps electricity

One interesting detail we found regarding Brazil’s energy consumption is that the use of diesel fuel alone surpasses that of electricity.

brazil energy sector consumption 2004 2018

With almost all of Brazil’s transport sector relying on the country’s roadways, diesel accounts for 19% of consumption. Brazil’s dependence on roads was highlighted during May’s truckers’ strike, which almost brought the country’s economy to a standstill.

While more energy is being generated in Brazil, the average cost of energy bills has increased. Between 2012 and 2017, the mean cost of power in the country has gone up by 53 percent, corresponding to 12 percentage points above inflation.

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Marcelo Soares

Marcelo Soares is a Brazilian journalist specializing in data journalism and reader engagement.

Euan Marshall

Originally from Scotland, Euan Marshall is a journalist who ditched his kilt and bagpipes for a caipirinha and a football in 2011, when he traded Glasgow for São Paulo. Specializing in Brazilian soccer, politics and the connection between the two, he authored a comprehensive history of Brazilian soccer entitled “A to Zico: An Alphabet of Brazilian Football.”

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