Spring 2025 - Cultural Post 2
Dam Economics and the Solar Savior?
Thanks to its large rivers like the Amazon, Brazil has been called “the world’s most water-rich nation.” These numerous rivers and their high elevation changes have made Brazil an ideal country for the hydroelectric industry. Since the 1980s, Brazil has been a world leader on renewable hydroelectric power and the country currently boasts 400 large and medium-scale dams. This has helped the country avoid the fossil fuel-based energy price fluctuations that have typified the past three decades of energy histories in most Western countries.
Brazil’s reliance on hydropower for electricity is a fragile one though, as the threat of climate change and specifically hydrology changes is endangering the reliability of its network. Dams rely on high water flow for stable energy output, but droughts have endangered this. In 2001 and 2014, Brazil experienced severe droughts which not only crippled its agricultural sector but also energy shortages as the country’s dams produced record-low amounts of electricity. During the 2001 energy crisis, ~90% of Brazil’s energy came from hydroelectric dams and the government was forced to implement energy rationing (where homes and factories were given a limited daily energy budget and severe punishments should they exceed it).
In 2014, the drought was the main culprit behind the decline from 3% GDP growth in 2013 to 0.5% growth in 2014, to 3.55% decline in 2015, and 3.2% decline in 2016 (Macro Trends 2024). To prevent such overreliance on hydropower from wrecking the economy in the future, Brazilian politicians removed red tape and introduced incentives for solar power adoption. In 2016, solar accounted for 0.02% of Brazil’s energy production (Araújo 2016) and officials hoped it would represent 3.3% by 2022. Growth far exceeded expectations with solar instead meeting 12% of the country’s energy needs. This was a 1,890% surge in solar generation. In half a decade, the country jumped from being 23rd in global solar production to 6th.
Brazil’s overdependence on hydroelectricity was something I examined in my Economic Development class last semester so what I wanted to do in this blog post was simplify the information for non-Econ concentrators, expand my findings specifically to look to the country’s future, and post the result to NING as I think few are aware Brazil’s rapidly rising status as a green energy titan.
In the next decade, Brazil stands a good chance of breaking into the top five and possibly the top four global solar producers with the second most solar power capacity in pre-construction behind China. Despite Brazil’s impressive growth in renewable energy, the country will need to triple its solar production by 2040 to stay on track with its climate goals, particularly the 1.5°C emissions target. However, this goal is at risk due to potential trade conflicts. Brazil currently produces almost none of its own solar panels or wind turbines, relying heavily on imports from China, which dominates global production (about 80% for solar panels and 60% for wind turbines).
Although Brazil’s current president Lula has a history of fostering strong economic ties with China — a relationship that helped Brazil’s economy thrive during the 2009 global recession — upcoming elections in 2026 could shift the country's foreign policy. Former president Jair Bolsonaro’s Liberal Party, which pursued closer relations with the United States and distanced Brazil from China, is expected to remain a key player. While neither Bolsonaro nor Lula are likely to run again, if Bolsonaro’s Liberal Party wins, it will likely realign Brazil with the United States, potentially bringing Chinese tariffs to Brazil.
If trade tensions escalate, Brazil's renewable energy sector could suffer. The U.S. has already seen hundreds of solar projects delayed due to rising tariffs, and Brazil could face similar setbacks. Such a scenario would threaten Brazil’s efforts to diversify from hydropower and jeopardize its 2040 climate goals.
Sources:
Brazil 2017 solar output https://web.archive.org/web/20211220231316/https://en.wikipedia.org...
Brazil 2022 solar output
https://en.wikipedia.org/wiki/Solar_power_by_country#Brazil
Brazil will need to triple its solar
https://climateanalytics.org/publications/setting-15c-compatible-wi...
Brazil GDP decline under 2014 drought https://www.macrotrends.net/global-metrics/countries/bra/brazil/gdp....
Interesting Guardian article on Brazil’s solar potential in 2016 https://www.theguardian.com/sustainable-business/2016/may/24/favela....
Brazil’s droughts endanger its energy security https://www.bbc.com/news/world-latin-america-21055803#:~:text=Then%....
Dam Economics and the Solar Savior?
Thanks to its large rivers like the Amazon, Brazil has been called “the world’s most water-rich nation.” These numerous rivers and their high elevation changes have made Brazil an ideal country for the hydroelectric industry. Since the 1980s, Brazil has been a world leader on renewable hydroelectric power and the country currently boasts 400 large and medium-scale dams. This has helped the country avoid the fossil fuel-based energy price fluctuations that have typified the past three decades of energy histories in most Western countries.
Brazil’s reliance on hydropower for electricity is a fragile one though, as the threat of climate change and specifically hydrology changes is endangering the reliability of its network. Dams rely on high water flow for stable energy output, but droughts have endangered this. In 2001 and 2014, Brazil experienced severe droughts which not only crippled its agricultural sector but also energy shortages as the country’s dams produced record-low amounts of electricity. During the 2001 energy crisis, ~90% of Brazil’s energy came from hydroelectric dams and the government was forced to implement energy rationing (where homes and factories were given a limited daily energy budget and severe punishments should they exceed it).
In 2014, the drought was the main culprit behind the decline from 3% GDP growth in 2013 to 0.5% growth in 2014, to 3.55% decline in 2015, and 3.2% decline in 2016 (Macro Trends 2024). To prevent such overreliance on hydropower from wrecking the economy in the future, Brazilian politicians removed red tape and introduced incentives for solar power adoption. In 2016, solar accounted for 0.02% of Brazil’s energy production (Araújo 2016) and officials hoped it would represent 3.3% by 2022. Growth far exceeded expectations with solar instead meeting 12% of the country’s energy needs. This was a 1,890% surge in solar generation. In half a decade, the country jumped from being 23rd in global solar production to 6th.
Brazil’s overdependence on hydroelectricity was something I examined in my Economic Development class last semester so what I wanted to do in this blog post was simplify the information for non-Econ concentrators, expand my findings specifically to look to the country’s future, and post the result to NING as I think few are aware Brazil’s rapidly rising status as a green energy titan.
In the next decade, Brazil stands a good chance of breaking into the top five and possibly the top four global solar producers with the second most solar power capacity in pre-construction behind China. Despite Brazil’s impressive growth in renewable energy, the country will need to triple its solar production by 2040 to stay on track with its climate goals, particularly the 1.5°C emissions target. However, this goal is at risk due to potential trade conflicts. Brazil currently produces almost none of its own solar panels or wind turbines, relying heavily on imports from China, which dominates global production (about 80% for solar panels and 60% for wind turbines).
Although Brazil’s current president Lula has a history of fostering strong economic ties with China — a relationship that helped Brazil’s economy thrive during the 2009 global recession — upcoming elections in 2026 could shift the country's foreign policy. Former president Jair Bolsonaro’s Liberal Party, which pursued closer relations with the United States and distanced Brazil from China, is expected to remain a key player. While neither Bolsonaro nor Lula are likely to run again, if Bolsonaro’s Liberal Party wins, it will likely realign Brazil with the United States, potentially bringing Chinese tariffs to Brazil.
If trade tensions escalate, Brazil's renewable energy sector could suffer. The U.S. has already seen hundreds of solar projects delayed due to rising tariffs, and Brazil could face similar setbacks. Such a scenario would threaten Brazil’s efforts to diversify from hydropower and jeopardize its 2040 climate goals.
Sources:
Brazil 2017 solar output https://web.archive.org/web/20211220231316/https://en.wikipedia.org...
Brazil 2022 solar output
https://en.wikipedia.org/wiki/Solar_power_by_country#Brazil
Brazil will need to triple its solar
https://climateanalytics.org/publications/setting-15c-compatible-wi...
Brazil GDP decline under 2014 drought https://www.macrotrends.net/global-metrics/countries/bra/brazil/gdp....
Interesting Guardian article on Brazil’s solar potential in 2016 https://www.theguardian.com/sustainable-business/2016/may/24/favela....
Brazil’s droughts endanger its energy security https://www.bbc.com/news/world-latin-america-21055803#:~:text=Then%....
Solar power by country - Wikipedia
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