Distributed generation to account for 38% of Brazil’s power capacity expansion through 2036

Brazil’s distributed micro and mini-generation sector will account for approximately 38% of the country’s power capacity expansion between 2026 and 2036, according to the draft Decennial Energy Expansion Plan 2036 released for public consultation by the Ministry of Mines and Energy. The segment is expected to grow from roughly 50 GW to 92 GW over the period, with solar photovoltaic installations representing 41.1 GW of the distributed generation expansion. Total power generation capacity nationwide is forecast to increase from 272 GW to 382 GW during the decade.

The distributed generation build-out will require cumulative investment of R$96 billion through 2036 and is projected to serve 13.5 million adopters by the plan horizon, generating an average of 14.1 GW. The segment’s share of total electricity generation is expected to rise from 8.2% in 2026 to 10.9% in 2036, while overall power generation climbs from 829 TWh to 1,133 TWh.

The plan allocates the majority of total sector investment to centralized generation, with R$415 billion directed to conventional plants, R$127 billion to transmission infrastructure and R$96 billion to distributed generation within a total envelope of R$638 billion for generation and transmission. Centralized expansion includes 14.2 GW of wind capacity, 9.5 GW of solar, 21.1 GW of non-renewable thermal plants and 9.3 GW of hydroelectric projects including small facilities. The system will also incorporate 7.2 GW of battery storage and 2 GW of pumped-storage hydroelectric facilities, marking the first inclusion of reversible hydroelectric plants in the decennial plan.

The distributed generation expansion coincides with grid operational challenges stemming from bidirectional power flows and protection coordination issues. Cyro Boccuzzi, president of the Latin American Smart Grid Forum, noted that current remuneration models based primarily on energy consumption in kilowatt-hours lack adequate pricing for time-of-use and flexibility services. The plan’s projections assume continued cost reductions for solar equipment, evolution of energy tariffs and changes to net metering rules, factors that will directly influence investment returns for distributed systems.

Electricity consumption is forecast to grow 3.4% annually through 2036, reaching 979 TWh, driven by electrification of transport, data center expansion and hydrogen production. The renewable share of Brazil’s overall energy matrix is expected to increase modestly from 50.2% to 51.2%, while the electric matrix maintains approximately 90% renewable generation. The public consultation remains open until November 6.