BMI View: Brazil will continue to offer numerous opp ortunities for power sector investors , despite a worsening of the country's economic recession. We hold a particularly positive outlook for the non-hydro renewables sector and the development of smart grids, underpinned by growing investor interest in the market. That said, high interest rates and continued currency weakness, along with a corruption investigation into public energy companies, will ma i ntain the power sector's growth rate below potential.
|e/f = BMI estimate/forecast. Source: National sources, BMI|
|Generation, Total, TWh||550.601||555.609||566.192||572.688||580.797||608.536||624.256|
|Consumption, Net Consumption, TWh||500.7||486.6||486.6||498.3||510.8||524.0||538.7|
|Capacity, Net, MW||133,301.1||137,459.0||146,428.3||149,769.7||153,240.6||161,105.9||165,840.9|
Latest Updates And Structural Trends
A government probe called 'Operation Radioactivity' is investigating allegations of corrupt contracting practices at Brazil's state-owned utility Eletrobras. A commission hired by Eletrobras to carry out an internal investigation is focusing on three Amazonian hydropower projects and the Angra 3 nuclear power plant. The probe is expected to be completed by end-2015 and could result in write-offs and delays to proje cts implementation.
It was announced in August 2015 Brazilian firms Odebrecht, Camargo Correa, Andrade Gutierrez and Queiroz Galvao would withdraw from the consortium selected to build Brazil's Angra 3 nuclear plant. The firms, which are being investigated over bribery charges under operation Lava Jato, cited non-payment by Eletronuclear as the reason for their decision. Accordingly, we revised down our growth forecast for the Brazilian nuclear sector.
A number of investment decisions by Brazilian distribution companies over the last few months confirmed our view that public and private players in the segment will increasingly focus on raising grid automation and developing smarter power grids.We believe Brazil's constrained hydropower supply and the government's fiscal consolidation efforts will increase the country's focus on tackling the inefficiencies of its power infrastructure.
Highlighting strong investor interest in the Brazilian power market, the country's latest and upcoming reverse energy auctions have seen a high number of projects contracted and registered, across conventional and renewables power-generating technologies. In particular, 36 natural gas-fired projects, with a cumulative capacity of 18,741 megawatts (MW), have been registered to compete in the A-5 2016 auction, strengthening our upbeat outlook for gas-fired power generation in Brazil over coming years.
Brazil current macroeconomic malaise will increase costs for power project developers through higher financing and import costs. These factors are tempering our growth outlook for power capacity in Brazil over the coming decade, which remains below the government's official targets. Delays to the implementation of large-scale hydropower projects inform our conservative forecasts for growth in the sector.
The Brazil Power Report features BMI Research's market assessment and independent forecasts covering electricity generation (coal, gas, oil, nuclear, hydro and non-hydro renewables), electricity consumption, trade, transmission and distribution losses and electricity generating capacity.
The Brazil Power Report also analyses the impact of regulatory changes, recent developments and the background macroeconomic outlook and features competitive landscapes comparing national and multinational operators by sales, market share, investments, projects, partners and expansion strategies.
- Use BMI's independent industry forecasts for Brazil to test other views - a key input for successful budgeting and strategic planning in the power market.
- Target business opportunities and risks Brazil's power sector through our reviews of latest power industry trends, regulatory changes, and major deals, projects and investments in Brazil.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Competitive Landscape analysis.
BMI Industry View
Summary of BMI’s key industry forecasts, views and trend analysis, covering power markets, regulatory changes, major investments, projects and company developments.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the power sector and within the broader political, economic and business environment.
BMI’s Power Forecast Scenario
Forecasts to end-2024 for all key indicators, supported by explicit assumptions, plus analysis of key downside risks to the main forecasts:
- Generation: Electricity generation total, thermal, coal, natural gas, oil, nuclear, hydropower, hydro-electric pumped storage and non-hydropower renewables.
- Transmission and Distribution Losses: Electric power transmission and distribution losses.
- Trade: Total imports and exports.
- Electricity Consumption: Net consumption.
- Electricity Capacity: Capacity net, conventional thermal, nuclear, hydropower and non-hydroelectric renewables.
BMI’s Power Risk Reward Index
BMI’s Risk Reward Indices provide investors (power companies, service companies and equity investors) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors,
Structure, size and value of the industry sector; overview of the industry landscape and key players; an assessment of the business operating environment, sustainable energy policies, pricing and the latest regulatory developments.
Key Projects Database
Details and analysis of all current and planned developments (new ventures, capacity expansion and other investments) across the sector broken down by location, sector type, capacity, value, companies and operational status.
Illustration of the power industry that exploits our data-rich, in-depth analysis of the leading players in the sector and examination of operational results, strategic goals, market position and the potential for investment.
Power Outlook long-Term Forecasts
Regional long-term power forecasts covering electricity generation, consumption and capacity for thermal, hydroelectric and nuclear power. These are supported by a country specific overview, alongside an analysis of key downside risks to the main forecasts.
Providing BMI’s near-term economic outlook for the region as a whole, as well as taking a close look at countries of particular interest and the latest trends and developments.
The Power Market Reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports, including Energy Information Administration (EIA), World Bank (WB) and United Nations (UN).