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Electricity Capacity of Brazil Reaches 215 GW in 2025, With 44% From Solar and Wind, But Curtailment Exposes Imbalance Caused by Subsidies
In July 2025, the installed capacity in Brazil reached 215 GW. Of this total, 16% corresponds to wind generation and 28% to solar. Together, these two sources represent 44% of the electricity matrix. The figure is impressive because the estimated average annual load for 2025 is 83.2 GW, reflecting the actual energy consumption over time.
Furthermore, on peak days, the National Interconnected System (SIN) can exceed 100 GW of instantaneous demand. Therefore, the robustness of the numbers highlights another issue.
Renewable energy producers face difficulties in dispatching the generated energy, as the system cannot absorb so much production.
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This phenomenon is known as curtailment, which consists of reducing or cutting production when generation exceeds the capacity for consumption or transmission. In practice, this means a massive waste of clean energy.
Unprecedented Power Cut in August
On August 10, curtailment was applied in its most drastic form. The National Electric System Operator (ONS) had to shut down all centralized wind and solar generation to maintain system balance at 60Hz.
This decision sparked intense debates in the sector, which grew supported by subsidies. Many experts now assess that the incentives have become excessive.
“Subsidy War”
Professor Reive Barros, former president of the EPE, business consultant, and technical coordinator of the Ibero-Brazilian Energy Conference (Coniben), assesses that the country is experiencing a “subsidy war.”
According to him, the incentives strongly stimulated distributed generation (GD). As a result, the load decreased, leading the ONS to control the system by cutting generation from centralized sources.
Barros clarifies: “There is no lack of generation, but rather a lack of load. What is observed is a subsidy war that has led to oversupply and power cuts.”
Growth of MMGD
In Brazil, the highlight is on Micro and Minigeneration Distributed (MMGD), which already totals 42.1 GW installed. This modality involves residential, commercial, and rural generation.
The ONS recognizes that the expansion represents an important advance for the diversification and sustainability of the matrix. However, it brings new challenges, such as predictability and availability throughout the day.
Barros recalls that the expansion of subsidies began in 2010 when energy auctions started to include alternative sources with special conditions.
The movement strongly propelled the sector but transferred costs to regulated consumers, who pay the subsidies through the Energ Development Account (CDE).
The Cost of Subsidies
Created in 2002, the CDE incorporated subsidies for renewable sources. In 2013, Law No. 12.783 expanded its objectives, including financial amortizations and tariff moderation.
Between 2020 and 2024, subsidies grew exponentially, with discounts in the connection of wind and solar plants. In 2024, incentives for renewables reached R$ 48 billion.
The turning point of this process was 2014 when solar generation entered the auctions and gained prominence due to falling costs.
The Birth of Distributed Generation
Normative Resolution 482 from Aneel, in 2012, allowed consumers to generate their own energy and offset consumption with credits. This officially marked the birth of MMGD.
As a result, various financing lines emerged. BNDES, Banco do Brasil, Caixa, and credit cooperatives offer over 100 active lines for residences, businesses, and rural producers.
Another incentive came from tax exemptions. Many states zeroed VAT for solar equipment. The federal government reduced IPI, PIS/Cofins, and Import Tax for panels until 2026.
Additionally, programs like the Harvest Plan facilitated rural credit for solar energy, with support from Banco do Nordeste (FNE Sol) and Banco da Amazônia (FNO).
In 2018, the National Policy for Photovoltaic Solar Energy was created, consolidating the movement.
Rapid Advancement of Renewable Energy
According to the ONS, the renewable energy park (solar, wind, and MMGD) totals 93,924.7 MW, equivalent to 38.7% of the total.
MMGD was the segment that grew the most, reaching 17.6% of capacity. In less than a decade, its growth has been so rapid that it is projected to surpass centralized solar and wind.
By 2029, MMGD is expected to reach 65,138 MW (24.2% of the total), compared to 36,128 MW from the other two sources in generation parks.
Transmission Bottleneck
All this energy needs to be transmitted. The pressure for investments in transmission lines has increased, with arguments ranging from hydrogen generation to support for data centers. The government aims to make Brazil a global player by 2030.
Barros emphasizes that expanding the lines is essential to meet the natural growth of loads and the installation of new projects. But he warns that transmission alone cannot be blamed for the cuts.
According to him, the central problem is oversupply. “This is the only product that, even without a customer, is under great pressure to increase supply,” he summarizes.
Renewable Energy: The Debate Continues
Brazil has achieved impressive numbers in renewable energy. However, the reality shows that excess incentives, combined with the rapid growth of MMGD, have created severe distortions.
While consumers finance subsidies, the system operator finds itself forced to cut clean energy generation to avoid imbalances.
The debate should continue at Coniben, scheduled for November 27 and 28 in Lisbon, bringing together experts from Brazil, Portugal, and Spain.
There, the paths to adjust the sector will be discussed, as the country needs to reconcile the expansion of renewables, system balance, and economic sustainability.
With information from JC.UOL.
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