Stated energy transition goals Energy policy priorities Achieve climate neutrality by 2050 Expand biofuel consumption, increase ethanol supply and Reduce GHG emissions from 2005 levels by 37% by 2025, raise the share of advanced biofuels and biodiesel in the mix and by 50% by 2030 Increase the share of renewables beyond hydropower to Achieve a 45% share of renewables in the energy mix by 2030 generate electricity to between 28% and 33% by 2030 Achieve an 18% share of sustainable biofuels in the energy mix Achieve 10% ef昀椀ciency gains in the power supply by 2030 by 2030 solar energy projects.56 The net results of these Country analysis policies are re昀氀ected in the high ETI scores on Key progress on ETI regulation and political commitment, infrastructure, and 昀椀nancial investment. Brazil is the ninth-largest economy in the world53 Brazil has become the largest producer of wind and ranks 14 out of 120 countries on the ETI 2023. 57 The overall ETI score for Brazil has seen an 8% energy in Latin America and ranks among the top 58 The Programme improvement since 2014, having slipped slightly 10 largest producers in the world. in 2020 and then increasing again. Brazil’s scores of Incentives for Alternative Electricity Sources on transition readiness have seen a signi昀椀cant paved the way to create local manufacturing improvement over the years. Today, Brazil ranks capacity for wind turbines and the components 59 The country has also implemented net among the top 14 countries on sustainability of industry. the energy system, owing to its high share of metering and the Energy Compensation System for renewables in the energy mix, with 80% of its Micro and Mini-Generation to promote distributed electricity coming from large hydropower plants.54 solar generation, which currently makes up 70% 60 Investments in wind and solar generation have of its installed capacity. Brazil’s national biofuels also increased signi昀椀cantly in recent years, making policy, RenovaBio, came into effect in 2020 Brazil’s electricity sector one of the least carbon- and set transportation emission targets, using intensive in the world. Recent droughts, however, decarbonization credits to encourage biofuel have caused the country to rely on more expensive production and consumption. RenovaBio also thermal power plants and imports to meet its promotes the development of advanced biofuels electricity demand, resulting in some challenges with even lower emissions and has succeeded in across the equitable, secure and sustainable making Brazil the second-largest biofuel producer 61 globally. dimensions within system performance. What’s next? Key imperatives and policies in place Brazil, with a large and complex grid system that While Brazil has made progress in creating a robust has not fully kept up with the demands of the enabling environment for energy transition – in energy transition, loses about 16% of the power it terms of building a stable regulatory environment generates. Historically, Brazil has lacked investment to attract capital and investment and building in new grid infrastructure, particularly in remote infrastructure to facilitate energy transition – areas where the potential for renewable energy more effort is needed to provide a stable policy development exists. A recent World Economic environment backed by ambitious targets to 62 highlights opportunities for the Forum report accelerate the transition. The government’s main country to unlock clean energy investments through goal is to structure the public policies needed to innovative solutions and collaborative actions, place the country as a world leader in clean energy focusing on three areas for acceleration: distributed while also leveraging its signi昀椀cant oil and gas generation, hydropower modernization and clean resources. Brazil has already implemented several energy access for isolated systems. These lessons policies to transition towards a more sustainable can also be applied to other countries at similar and low-carbon energy system. The Auctions levels of clean energy development. The proposed for Renewable Energy Support programme was solutions include the creation of a distributed launched in 2004 to encourage the installation generation 昀椀nancing toolbox to support developers of new renewable energy projects through a and 昀椀nanciers; suggestions of regulatory changes competitive bidding process. These auctions have to remove barriers to the commercialization not only helped reduce the cost of renewable of hydropower plant services; climate risk and energy in Brazil, making it more competitive with resilience mapping for hydropower generation traditional energy sources, but have also been assets; raising awareness of the Climate Bond successful in attracting signi昀椀cant investment in the Standard Hydropower Criteria among potential sector. With the A-3 and A-4 auctions in July 2021, investors; and creating a platform for existing the government allocated 420 MW of wind and 270 independent power producers to 昀椀nd developers as MW of solar, as well as biomass and hydro.55 In well as technical, marketing and 昀椀nancial support to addition, the Brazilian Development Bank recently integrate renewables and create hybrid generation approved $650 million in 昀椀nancing for wind and models in isolated systems. Fostering Effective Energy Transition: 2023 Edition 42