Electricity in Brazil: history, achievements and challenges

Electricity is a fundamental resource for Brazil's progress. Since its arrival at the end of the 19th century, with the construction of the first hydroelectric plant in Niterói, the Brazilian electricity sector has developed rapidly. Today, Brazil is the fourth largest producer of electricity in Latin America.

Its importance for the country's economy is indisputable, being used in various sectors such as industry, commerce, agriculture and services, generating employment and income.

Come explore the history of electricity in Brazil, its vital role in the economy and society, and how it positively influences the lives of millions of Brazilians. Continue reading and delve into the crucial universe of electricity in the country!

Electricity in Brazil: a brief history

Electricity has been a powerful force in Brazil's history. The first records of electrical experiments in the country date back to the 18th century, when Brazilian naturalist José da Silva Lisboa conducted a series of experiments with static electricity. Lisboa was also the first to build an electrical machine in Brazil.

The first hydroelectric plant was built in 1889 in the city of Niterói, in the state of Rio de Janeiro. The plant generated electricity for the city's public lighting. The construction of other hydroelectric plants followed, and electricity became increasingly important for Brazil's development.

Advances in electromagnetism and electricity in the 19th century had a profound impact on Brazil. They enabled the development of new electrical devices, which changed the way people lived, worked and communicated. Electricity also became an important economic factor, and helped Brazil develop into a modern country.

First public demonstration of electric lighting in the country

The first public demonstration of electric lighting in Brazil took place in 1879, at Central do Brasil, in the city of Rio de Janeiro, on the initiative of Emperor D. Pedro II, who had received a set of incandescent lamps from the American inventor Thomas Edison.

The demonstration was a success and attracted the attention of many people who were impressed by the novelty.

Electric lamps were brighter, more durable and safer than the gas or oil lamps that had been used until then.

However, electric lighting was not yet available to the entire population, as it depended on the construction of generating plants and distribution networks.

The first Brazilian city to have permanent electric street lighting was Campos dos Goytacazes, in the north of the state of Rio de Janeiro, in 1883. The city had a wood-fired thermoelectric plant that supplied energy to 39 lamps installed on iron poles.

First electricity generation and distribution systems in urban centers

• The first electricity generation and distribution systems in urban centers appeared at the end of the 19th century, with the aim of providing electric lighting to replace the gas or oil lamps that were used until then.

• These systems were based on the production of electric current through steam or water-powered machines, called generators or dynamos, which were installed in power plants close to the places of consumption.

• The electric current produced could be of two types: direct current (DC), which maintained a constant direction and intensity, or alternating current (AC), which periodically varied its direction and intensity.

• Direct current was used to power low-voltage (100 volt) incandescent lamps, while alternating current was used to power high-voltage (up to 3,000 volt) arc lamps.

• The distribution of electrical current was done through conducting cables that left the power stations and branched out through the streets, connecting to lighting posts or to homes and commercial establishments.

• The voltage of the electric current was reduced by means of transformers, which were devices capable of altering the relationship between voltage and current in an electrical circuit, keeping the power constant.

• Electric power generation and distribution systems faced several technical and economic challenges, such as energy loss in cables, limited distance between power plants and consumers, competition between supplying companies, and government regulation.

Electricity grid growth in cities and rural areas

The growth of the electricity grid in cities and rural areas is related to the increased demand for electricity for various purposes, such as lighting, heating, refrigeration, communication, transportation, industry, commerce and services.

To meet this demand, it is necessary to expand and modernize the electricity generation, transmission and distribution systems, which are responsible for converting primary energy sources (such as water, wind, sun, biomass, natural gas, coal and uranium) into electricity and taking it to end consumers.

The growth of the electricity grid in cities and rural areas involves several technical, economic, environmental and social challenges, such as:

• Ensure the safety, quality, reliability and efficiency of the supply of electrical energy;

• Reduce losses and operating and maintenance costs;

• Diversify generation sources and increase the share of renewables;

• minimize environmental impacts and greenhouse gas emissions;

• Promote universal access to electricity and social inclusion;

• Encourage the rational and conscious use of electrical energy;

• Stimulate technological innovation and the digitalization of electrical systems;  

• Integrate isolated and interconnected systems;  

• Encourage consumer participation as active agents in demand management and distributed generation.

The growth of the electricity grid in cities and rural areas also depends on public policies, regulation, planning, investment, financing, inspection, education and awareness of the various actors involved in the electricity sector, such as government, companies, research institutions, civil society organizations and consumers.

Role of companies and investments in the expansion of electrical infrastructure

Businesses and investors play a key role in expanding basic electrical infrastructure. They provide the capital needed to build and operate power plants, transmission and distribution lines, and other electrical infrastructure. They also develop new technologies that make power generation and distribution more efficient and sustainable.

Some of the main ways in which companies operate and invest in this sector are:

• Participate in concession or authorization auctions to build and operate new generating plants, transmission lines and electricity distribution networks, which are promoted by the federal government through the National Electric Energy Agency (ANEEL) and the Electric Energy Trading Chamber (CCEE).

• Make investments in modernization, expansion, maintenance and improvement of the quality of services provided by companies already existing in the electrical sector, seeking to increase the efficiency, reliability, safety and resilience of electrical systems.

• Innovate in technologies, processes, business models and management in the electricity sector, incorporating solutions such as distributed generation, renewable energy, energy storage, smart grids, electric mobility, digitalization, automation, internet of things, big data, artificial intelligence, among others.

Adhere to government programs and incentives for the expansion of basic electrical infrastructure, such as:

• Investment Partnerships Program (PPI);

• Growth Acceleration Program (PAC)

• National Program for Universal Access to and Use of Electric Energy (Light for All)

• Incentive Program for Alternative Sources of Electric Energy (Proinfa)

• Distributed Electric Power Generation Development Program (ProGD), among others.

• Establish partnerships and strategic alliances with other companies, research institutions, civil society organizations and consumers to make projects of common interest in the electricity sector viable, sharing resources, knowledge, experiences and benefits.

Expanding basic electrical infrastructure is a priority for the future. It will enable society to continue to grow and develop in a sustainable way.

Some specific examples of how companies and investments are helping to expand basic electrical infrastructure:

• Energy companies are building new renewable energy plants, such as solar and wind farms . These plants are more efficient and sustainable than traditional fossil fuel plants.

• Technology companies are developing new technologies that make power generation and distribution more efficient. These technologies include energy storage batteries, smart grids, and electric vehicles.

• Governments are investing in basic electrical infrastructure, such as transmission and distribution lines. These investments are helping to ensure that electricity is available to everyone, even in rural areas.

Regulatory Framework and the Creation of the National Electricity Sector 

Laws and regulations that defined the Brazilian electricity sector

The Brazilian electricity sector is governed by a set of laws and regulations that establish the rules, rights, duties, competences and responsibilities of the agents involved in the production, transmission, distribution and commercialization of electricity in the country.

• The main law that defines the legal framework for the Brazilian electricity sector is Law No. 9,427/1996, which created:

  
  

• The National Electric Energy Agency (ANEEL), the entity responsible for regulating and monitoring the electricity sector

• The National Electric System Operator (ONS), the entity responsible for coordinating and controlling the operation of electricity generation and transmission facilities in the National Interconnected System (SIN).

• Law No. 9,427, of December 26, 1996: This law created the Brazilian Electric System (SEB), which is a set of facilities and equipment that transport, distribute and commercialize electric energy in the country.

• Law No. 9,648/1998, which provides for the deverticalization of activities in the electricity sector.

• Resolution No. 456, of September 30, 2000: This ANEEL resolution created the Incentive Program for Alternative Sources of Electric Energy (Proinfa), which is a federal program that encourages the generation of electric energy from alternative sources, such as solar, wind and biomass.

• Law No. 9,991/2000, which establishes the obligation of concessionaires, licensees and authorized parties of public electricity services to invest resources in research and development and energy efficiency.

• Law No. 10,438/2002, which creates the Incentive Program for Alternative Sources of Electric Energy (Proinfa) and the National Program for Universal Access and Use of Electric Energy (Luz para Todos); among others.

• Resolution No. 482, of September 17, 2002: This ANEEL resolution created the Wholesale Electric Energy Market (MAE), which is a market where electric energy generation and distribution companies can buy and sell electric energy among themselves.

• Law No. 10,848/2004, which provides for the commercialization of electric energy and defines the bases of the so-called “New Model of the Electric Sector”, which introduced changes in the organization and functioning of the sector, such as the creation of the Electric Energy Commercialization Chamber (CCEE), the entity responsible for facilitating the purchase and sale operations of electric energy in the wholesale market, and the holding of auctions for contracting new and existing energy.

• ANEEL Normative Resolution No. 1000 of 2021 is a law that regulates the public electricity distribution service in Brazil. It defines the rights and duties of consumers and users of this service, such as supply conditions, tariffs, deadlines, penalties, compensation, complaint procedures, among others. It also establishes standards for service quality, such as continuity indicators, voltage limits, service standards, among others. It repeals previous laws that dealt with the same subject and comes into effect on January 1, 2022. This law is important to ensure the safety, efficiency, and sustainability of the public electricity distribution service in the country.

Creation of state and private companies to operate in the sector

The role of state-owned companies in the Brazilian electricity sector increased further in the 1950s, with the construction of large hydroelectric plants, such as the Itaipu Hydroelectric Plant. However, from the 1990s onwards, the federal government began to privatize some of the state-owned companies in the electricity sector, such as Eletrobras.

Currently, the Brazilian electricity sector is a mixed sector, with state-owned and private companies operating side by side. State-owned companies still play an important role in the sector, but private companies have grown rapidly in recent years.

Here are some of the main state-owned and private companies operating in the Brazilian electricity sector:

State-owned companies

• Eletrobras

• Chesf

• Electronorth

• Furnas

• Itaipu Binational

• Coelba

• Cosern

• Among others

Private companies

• CPFL Energy

• Energisa

• Light

• Neoenergia

• Among others

Challenges and Achievements of the Electricity Sector

The Brazilian electricity sector has faced a series of difficulties over time, such as energy crises and distribution problems.

• Oil crisis : In the 1970s, Brazil suffered the effects of the oil shocks, which raised international fuel prices and affected the national economy, which was heavily dependent on oil imports. To reduce this dependence, the federal government adopted a policy of encouraging the construction of large hydroelectric plants, such as Itaipu, Tucuruí and Ilha Solteira, which increased the country's electricity generation capacity.

• 2001 Rationing : In 2001, Brazil faced a serious energy crisis, caused by a combination of factors such as lack of rain, low levels of hydroelectric reservoirs, delays in the construction of new plants and transmission lines, and increased demand for electricity.

• To prevent the collapse of the electrical system, the federal government imposed mandatory rationing of electricity throughout the country, which lasted for about eight months and required a 20% reduction in consumption. The rationing had negative impacts on the economy, industry, commerce and the population.

• 2009 Blackout : On November 10, 2009, a blackout hit 18 Brazilian states and part of Paraguay, leaving around 60 million people without electricity for a few hours.

• The blackout was caused by a failure in the transmission line connecting the Itaipu hydroelectric plant to the National Interconnected System (SIN), caused by a storm with lightning and strong winds. The blackout revealed the weaknesses of the Brazilian electrical system and the need for investments in security and redundancy.

• 2014-2015 water crisis : between 2014 and 2015, Brazil faced one of the worst droughts in its history, which mainly affected the Southeast and Central-West regions, where most of the country's hydroelectric capacity is concentrated.

• The reservoirs of hydroelectric plants have reached critical levels, forcing the activation of thermoelectric plants, which are more expensive and polluting. In addition, the water crisis has caused problems in the supply of water for human consumption and irrigation in several cities.

• Current water crisis : Since 2020, Brazil has been facing a new water crisis, considered the worst in 91 years, which mainly affects the Southeast and South regions of the country. The reservoirs of hydroelectric plants are at very low levels, putting the country's energy security at risk.

• To avoid rationing or blackouts, the federal government adopted measures such as the creation of the Chamber of Exceptional Rules for Hydropower Management (CREG), the activation of thermoelectric plants and the contracting of emergency energy. In addition, the government launched a campaign to encourage consumers to voluntarily reduce their electricity consumption.

And what significant achievements were achieved?

The Brazilian electricity sector has achieved significant achievements in recent years in terms of generation capacity and efficiency.

• Expansion of electricity generation : Brazil has significantly increased its installed electricity generation capacity in recent decades, rising from 58 GW in 2000 to 177 GW in 2020, a growth of more than 200%. In 2021, another 7.5 GW were added to the national electricity system, with a focus on renewable sources such as wind and solar, which accounted for 75% of the plants installed in the free energy market. The forecast for 2022 is a further 7.7 GW of expansion.

• Diversification of the electricity grid : Brazil has a diversified and predominantly renewable electricity grid, with around 84% of clean sources, such as hydroelectric, wind, solar and biomass. This share is much higher than the world average, which is only 27%. Brazil has also invested in expanding alternative sources of electricity, such as the Incentive Program for Alternative Sources of Electric Energy (Proinfa), which has encouraged the installation of wind farms, small hydroelectric plants and biomass thermoelectric plants.

• Integration of the electrical system : Brazil has one of the largest interconnected systems in the world, which allows the transportation of electrical energy between the different regions of the country, taking advantage of the complementarities between sources and seasonality of demand. The National Interconnected System (SIN) covers approximately 98% of the national territory and has more than 170 thousand km of transmission lines and more than 400 thousand MVA of transformation capacity. In 2021, another 7.8 thousand km of transmission lines and another 18 thousand MVA of transformation capacity were completed.

• Development of distributed generation : Brazil has encouraged distributed generation (DG), which is the production of electricity close to the point of consumption, through renewable and non-polluting sources. DG brings benefits such as reducing losses in the grid, reducing dependence on distributors, saving on electricity bills and preserving the environment. Currently, Brazil has more than one million consumer units benefiting from DG, with an installed capacity of over 6 GW. Most of the DG in Brazil is solar photovoltaic.

• Technological innovation and digitalization : Brazil has sought to incorporate new technologies and processes into the electricity sector, aiming to increase the efficiency, reliability, safety and resilience of electrical systems. Some of the innovative solutions that are being adopted or studied in the Brazilian electricity sector are: energy storage, smart grids, electric mobility, internet of things, big data, artificial intelligence, among others.

Conclusion

Electricity is an essential resource for Brazil's development, present in all spheres of society and the economy. The trajectory of the Brazilian electricity sector is marked by important achievements, such as universal access and leadership in renewable energy, but it also faces challenges, such as energy crises and environmental impacts.

To ensure a sustainable future, it is crucial to invest in innovation, infrastructure and adequate regulation, as well as to be prepared for the global energy transition. With strategic vision and consistent public policies, the electricity sector will continue to drive the country's progress and become an example for the world.