Brazil Power Report Q3 2016

Date: July 6, 2016
Pages: 69
US$ 1,295.00
Report type: Strategic Report
Delivery: E-mail Delivery (PDF)
ID: B5A66600F4DEN

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Includes 3 FREE quarterly updates

BMI View: We maintain that the Brazilian electricity market will offer opportunities to risk-tolerant project developers and power sector investors over the coming years, despite the country's deepening economic recession in 2016. The renewables and hydropower sectors will present the biggest potential to international investors, but we see opportunities also in power transmission and distribution. We also highlight, however, that lower power consumption, coupled with high financing and import costs will be significant risks to operating in the country in the short run.

Latest Updates And Structural Trends
  • Brazil's economic crisis has started to reduce investment in new power projects and to threaten the implementation of those already planned, as a result of a contraction in power consumption and higher financing and import costs for project developers. These factors - coupled with an ongoing investigation on state-run utility Eletrobras, which could result in delays and asset impairments - have brought us to downgrade our forecast for growth in the natural gas, renewables and nuclear power sector this quarter.
  • We expect weaker growth in Brazil's natural gas-fired power generation in 2016 and through 2025 as a result of both greater hydropower generation and market dynamics. In particular, in a context of lower power consumption - due to weaker economic growth - our projections for growth in hydropower and renewables generation indicate that Brazil will need to rely less on thermal power generation than we had previously expected. Supporting this view, only one gas-fired power project was contracted at Brazil's latest A-5 New Energy auction, held in April.
  • We maintain a relatively positive long-term outlook for Brazil's renewables sector, due to continued government support for the industry and resilient investor interest. However, this quarter we have seen the first negative impacts of the country's economic crisis on the wind and solar power sectors. No wind power projects were contracted in April at the A-5 energy auction, despite a large number of projects had been registered ahead of the tender. Moreover, also in April, Brazilian and international project developers accounting for the majority of the solar capacity contracted in 2014 asked to postpone the date in which their projects are supposed to start operations, from 2017 to 2019. The companies said that the slump in the Brazilian real and lack of local supplies have made the project development economically unfeasible.
BMI Industry View
  Table: Headline Power Forecasts (Brazil 2015-2021)
Industry Forecast
Brazil Snapshot
  Table: Country Snapshot: Economic and Demographic Data (Brazil 2015-2020)
  Table: Country Snapshot: Economic and Demographic Data (Brazil 2020-2025)
  Table: Country Snapshot: Power Sector
Brazil Power Forecast Scenario
Electricity Generation And Power Generating Capacity
  Table: Results For Gas-Fired Projects In Latest Power Auctions
Renewables Generation And Capacity Forecast
  Table: Solar & Wind Capacity Registered And Contracted In Recent And Upcoming Auctions
  Table: Total Electricity Generation Data And Forecasts (Brazil 2014-2019)
  Table: Total Electricity Generation Data And Forecasts (Brazil 2020-2025)
  Table: Electricity Generating Capacity Data And Forecasts (Brazil 2014-2019)
  Table: Electricity Generating Capacity Data And Forecasts (Brazil 2020-2025)
Electricity Consumption
  Table: Total Electricity Consumption Data And Forecasts (Brazil 2014-2019)
  Table: Total Electricity Consumption Data And Forecasts (Brazil 2020-2025)
Transmission & Distribution
  Table: Electric Power T&D Losses Data And Forecasts (Brazil 2014-2019)
  Table: Electric Power T&D Losses Data And Forecasts (Brazil 2020-2025)
  Table: Trade Data And Forecasts (Brazil 2014-2019)
  Table: Trade Data And Forecasts (Brazil 2020-2025)
Industry Risk/Reward Index
Latin America - LatAm RRI: Argentina Gaining Amid Chile's Continued Outperformance
  Table: Latin America Power Risk/Reward Index (Scores Out Of 100)
Brazil Power Risk/Reward Index
Market Overview
Key Policies And Market Structure
Regulation And Competition
Sustainable Energy Policies
  Table: Tariff Surcharges Before And After Reduction
Brazil Power Projects Database
Competitive Landscape
Tractebel Energia
Company Profile
Regional Overview
Latin America - LatAm Power: Key Regional Themes
  Table: BMI's Key Themes For Latin America's Power Industry In 2016 And Beyond
  Table: Glossary Of Terms
Methodology And Sources
Industry Forecast Methodology
Risk/Reward Index Methodology
  Table: Power Risk/Reward Index Indicators
  Table: Weighting Of Indicators
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