- Posted by: criss
- Category: Global PV Market Insights Report
1. Brief Intro-Brazil
Brazil’s full name is the Federal Republic of Brazil, the largest and most populous country in Latin America. Brazil has a total land area of 8.5 million square kilometers and a total domestic population of 210 million. It has the 5th largest area and population in the world. Its GDP ranks 1st in Latin America and 8th in the world.
As a member of the BRICS, Brazil is one of the most watched emerging markets in the world and the fastest growing country in the world. Brazil’s economic structure is mainly export-oriented, with developed agriculture and animal husbandry and a good industrial base. It is also the 9th largest oil producer in the world and the country with the most abundant hydro resources. Since 2014, economic development has slowed down as the economy in whole Latin America has been sluggish.
Brazil is located in the east of South America, east of the Atlantic ocean, belongs to the equatorial country. The Brazilian and Guyana plateaus account for about 60% of the national area, making them the largest plateaus in the world, with better solar irradiation resources than the amazon plains closer to the equator. The geographical conditions of the low latitude plateau make the lighting resources of Brazil occupy the forefront of the world, superior to China, the United States and other major world economies.
2. Power Market Situation
Brazil is the continent’s third-largest producer and consumer of electricity, just after the United States and Canada.
Brazil is the country with the richest hydro resources in the world. The amazon river is the river with the largest flow in the world, equivalent to the flow of 7 Yangtze river and accounting for 20% of the total flow of world rivers. Therefore, hydropower has always been the most important type of energy in Brazil.
However, as the amazon river basin is located in the north of Brazil, and most of its major cities are located in the south, generating capacity is far away from urban demand centers, so the distance challenge of transmission lines is quite large, which also greatly affects the reliability of electricity. In addition to investing in transmission lines, building power stations directly in the south-east is an important solution.
Hydropower remains Brazil’s most important energy source. Brazil is the world’s second largest producer of hydropower after China. In 1998, hydropower accounted for nearly 90% of the country’s electricity power generation.
Brazil’s non-hydropower renewable energy mainly includes biomass, wind and solar power generation. Brazil has excellent natural resources, and all three categories of renewable energy have great potential. Amazon rainforest holds 1/5 of the world’s timber reserves. The southern region is located in the monsoon belt and the plateau region is rich in sunlight irradiation resources. The three categories of renewable energy have gone through three stages of development since 2000 due to the influence of technological progress.
Until 2010, biomass power was the main component of non-hydro renewable energy.
From 2010 to 2016, the number of wind power installations increased rapidly.
Since 2017, the number of solar power installations has doubled.
3. Related Solar PV Policy
- Energy Auction
In 2004, Brazil reformed its electricity sector and legislated the use of energy auctions to purchase electricity.
In 2007, according to the technical characteristics of renewable energy (biomass, wind and solar), the energy auction law was revised, and the first special auction of renewable energy was held in the same year.
In 2008, the first “reserve energy auction” to designate renewable energy technologies was held.
In 2017, major adjustments and reforms were carried out in the auction of renewable energy, clearing the backlog of auction capacity that had not been installed in previous years, and strictly enforcing regulations on the period of grid connection. Among them, the power supply period is divided into A-4, A-5 and A-6, respectively referring to three years, five years and six years before the supply to grid power begins. Photovoltaic projects are generally a-4, the contract term is generally 20 years, and the auction frequency is usually once A year.
From 2007 to 2014, renewable energy auction capacity mainly consists of wind power. Solar has been the largest renewable energy auction volume since 2014.
- PDE Development Target
In 2010, the Brazilian government set out plans to expand renewable energy in 2019, but the renewable energy targets at that time only included hydropower, biomass and wind power, not solar power.
In 2016, the solar energy installation target, PDE 2024, was proposed for the first time. The goal is to reach 8320MW by 2024.
In 2017, the number of photovoltaic installations in Brazil increased greatly, so a new PDE 2026 was formulated. The target is to reach 13160MW of solar power by 2026, and the proportion of non-hydropower renewable energy reaches 48%. Compared to PDE 2024, the target installation volume is increased by 58%.
- The Small Scale Net Metering
In 2012, the national electricity and energy administration initially set up the net metering act.
In 2015, the net metering rules for emerging renewable energy sources such as solar energy were revised.
Small-scale is defined as, the upper limit of micro-distributed capacity is 75KW, and the upper limit of small-scale centralized capacity is 5MW.
- Other Policy
MME act 538/15, distributed generation renewable energy action.The main idea: incentives for renewable energy sellers. The deployment of rooftop solar power projects in schools, hospitals and other state-owned units. Consortia or cooperative organizations can share power generation management and allocate power generation to consumers.
4. Solar PV Development Info
PV installations in Brazil began to increase rapidly from 2017, mainly due to the capacity of large-scale PV projects auctioned after 2014 and connected to the grid. Brazil has installed more than 1GW of new capacity every year since 2017.
At the beginning of 2019, about 735MW large-scale photovoltaic projects are under construction in Brazil. It is estimated that the installed capacity of large-scale photovoltaic projects will be more than 960MW in 2019, and the installed capacity of distributed photovoltaic projects will be 500MW. The annual installed capacity is expected to exceed 1.4GW, and the total installed capacity will reach 4GW.
From the perspective of the distribution of photovoltaic installations, the newly installed photovoltaic installations are mainly the auctioned ground-based power station projects. Before 2017, photovoltaic installations were mainly distributed, and the proportion of ground-based power station installations in 2018 has exceeded 80%.
Bahia and Minas Gerais are the two states with the largest installed capacity, both in southeastern Brazil and accounting for 46% of the country’s total installed capacity.
The auction information of photovoltaic projects since 2014 is as follows. The next auction time is October 2019 and April 2020, and A-6 and A-4 auctions will be held respectively.
The latest price is the A-4 auction to be held in June 2019, with A grid connection price of 0.066BRL/KWH.
Due to the high labor cost in Brazil, the cost of domestic photovoltaic products is 35% to 50% higher than that of imports. By the end of 2018, Brazil’s domestic production accounted for only 23 percent of the photovoltaic projects completed or under construction, while imports accounted for 77 percent.
By the end of 2018, Brazil’s top 3 brands of photovoltaic module shipments are Jinko, Candian Solar and BYD. The top 3 inverter manufacturers in terms of shipments are GE, FIMER and Electronica Santerno.
5. Solar Module Import (from China)
According to the export volume data analyze of PV modules of GesseyNewEnergyInfo, China exported 1.9GW of PV modules to Brazil in 2018, with the average monthly export volume of 159MW.
After March 2019, the export of Brazilian modules increased significantly, far exceeding the level of the same period in 2018. In July, the export volume reached 398MW, ranking the 6th in the export volume of Chinese photovoltaic modules.
According to the version proportion in the export analysis report of GNEI, the Brazilian market prefers 72 large modules, but rarely 60 cell mdoules, and the proportion of large modules is always over 99%. In line with the Brazilian market, the new installed capacity is mainly concentrated on the ground power stations.
The Brazilian market prefers polycrystalline in 2018. Since 2019, the proportion of demand for monocrystalline has increased significantly, but it is still far less than that of polycrystalline. Polycrystalline accounted for 83% of the demand in July 2019
Brazil has become an important GW class PV market since 2017. Thanks to the relatively stable annual PV project auction and the government’s PV installation target of 2026, Brazil’s PV product demand is expected to remain robust.
It is estimated that Brazil will add 1462MW of photovoltaic installations in 2019, and the main demand for Chinese module is 72 cell polycrystalline.
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