Brazil’s Distributed Generation Surges to 37 GW, 20% Growth Forecast for 2025

  • Brazil’s distributed generation (DG) capacity exceeds 37 GW, with 20% growth expected in 2025. This will drive BRL 25 billion in investments and create 100,000 jobs.
  • DG is mainly concentrated in residences (18.18 GW), with São Paulo leading state rankings at 5.33 GW.
  • Concerns about DG’s impact on the grid grow, but ABGD argues DG helps reduce strain, while ONS urges more investment in infrastructure and resource management.

Brazil’s distributed generation (DG) capacity now exceeds 37 GW, according to the Brazilian Association of Distributed Generation (ABGD). The association projects DG to grow by 20% in 2025, driving over BRL 25 billion in private investments and creating 100,000 new jobs.

Residential installations dominate DG, contributing 18.18 GW. Commercial establishments follow with 10.63 GW, rural facilities add 5.09 GW, industries generate 2.67 GW, and public institutions contribute 0.41 GW. São Paulo leads with 5.33 GW, while Minas Gerais (4.63 GW), Paraná (3.30 GW), Rio Grande do Sul (3.29 GW), and Mato Grosso (2.39 GW) follow closely.

As DG expands, concerns about its impact on the National Interconnected System (SIN) arise. Critics argue that DG could cause curtailment, reducing generation due to limits in transmission infrastructure.

However, ABGD argues that DG matches consumer demand and doesn’t rely on transmission networks. “DG serves consumer needs directly, reducing strain on the grid,” said ABGD President Carlos Evangelista. He emphasised that poor planning and transmission network limitations, not DG, cause curtailment issues. “DG produces energy close to where it’s consumed, reducing the need for costly transmission infrastructure and improving efficiency,” he said.

The National System Operator (ONS), through its Medium-Term Grid Operation Plan (PAR/PEL), predicts DG capacity will reach 50 GW by 2029, making it Brazil’s second-largest energy source after hydroelectric power. Micro and mini DG and Type III plants contribute 19.8 GW, pushing Brazil’s total DG capacity to 53 GW. This accounts for 22% of the country’s energy capacity, which ONS does not monitor in real-time.

In certain regions, such as Minas Gerais, Rio Grande do Sul, Mato Grosso, and Piauí, DG has reversed energy flows. Distribution networks in these areas now send energy back into the transmission system. ONS urges energy distribution companies to manage DG resources more actively. The operator also calls for more investments in dynamic voltage control equipment, such as synchronous compensators.

As DG continues to grow, ONS warns that centralised solar and wind power may need to be reduced by up to 40 GW by 2029, especially at midday when DG peaks. ONS estimates that micro and mini DG will generate 18.35 GW by 2024, reaching 37 GW by 2029.

Large power producers suggest DG should share in the generation cuts. Concessionaires have recommended new DG projects inject energy into the grid at night. This could create opportunities for battery storage, but high taxes and unclear compensation rules keep the technology expensive.

As Brazil’s DG sector grows, the country must address integration challenges. Better planning, increased investments in transmission infrastructure, and support for battery storage will be key to maintaining grid stability while meeting future energy demand.

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