Brazil holds significant potential for the expansion of small and medium-sized hydroelectric power, promising massive investments and the creation of thousands of jobs.
Brazil’s clean energy sector envisions a promising future with the immense, untapped potential of Small Hydropower Plants (PCHs) and Hydroelectric Generating Stations (CGHs). A detailed survey by the Brazilian Association of PCHs and CGHs (ABRAPCH), based on data from the National Electric Energy Agency (ANEEL), reveals approximately 16.9 GW in projects that have already initiated environmental studies. This latent capacity, if realized, could boost the Brazilian economy by approximately R$169 billion, in addition to creating over one million direct and indirect jobs during the implementation phase.
This scenario emerges at a time when the country already boasts a robust installed capacity of about 107 GW in hydroelectric power, yet still maintains approximately 40% of its hydro potential underutilized. The focus on ventures up to 50 MW, such as PCHs and CGHs, represents a smart strategy to harness these resources in a decentralized and sustainable manner, diversifying the national energy matrix and strengthening distributed generation. The job estimation, based on 60 jobs per installed megawatt, highlights the significant socioeconomic impact of these projects.
Expansion with a Regional Focus
The growth opportunity for small-scale hydropower is not limited to a single region but is strategically distributed across the national territory. The Central-West stands out with a potential of 5,631 MW, translating into approximately R$56.31 billion in investments and the potential to generate 338,000 jobs. Following suit, the South region presents 4,877 MW, with an investment potential of R$48.77 billion and approximately 293,000 jobs. The Southeast also emerges as an important hub, with nearly 4,370 MW, totaling R$43.70 billion in investments and over 262,000 employment opportunities.
The North and Northeast regions, although with smaller volumes in megawatts, also have relevant contributions. The North holds a potential of 1,230 MW, with estimated investments of R$12.30 billion and about 74,000 jobs. The Northeast, meanwhile, has 787 MW, projecting R$7.87 billion in investments and approximately 47,000 job openings. This geographical spread demonstrates the reach of renewable energy and its potential for economic development in various parts of the country, promoting inclusion and opportunities in different local contexts.
The Foundation of Investment: Predictability and Legal Certainty
The realization of this vast small and medium-sized hydropower potential, however, is intrinsically linked to creating a favorable and secure business environment. According to ABRAPCH, attracting long-term investments for the sector directly depends on factors such as legal certainty, predictability regarding environmental processes, and facilitated access to appropriate financing lines.
“The capital-intensive nature and decades-long horizon of these projects make issues such as regulatory stability, the duration of environmental processes, and the cost of credit particularly relevant”, highlighted the entity’s Vice-President of the Board, Epitácio Barzotto. Regulatory stability and clarity in environmental standards are crucial to mitigate risks and ensure the economic viability of ventures that demand high initial investments and have a long operational life cycle.
Brazil in Perspective: Global Opportunities
When compared to other global energy powers, Brazil still has considerable room for expansion in the hydroelectric sector. Currently, the country operates approximately 1,600 hydroelectric plants of all sizes. In contrast, China leads with 446 GW of installed capacity and about 45,000 plants, in addition to a significant pipeline of projects under construction. The United States, in turn, has 103 GW and approximately 2,250 ventures.
This comparison highlights Brazil’s vast territory and its still available water resources. ABRAPCH President, Lucas Pimentel, emphasized that the 16.9 GW inventory represents an ocean of opportunities, but reinforced the need for each project to undergo rigorous regulatory and licensing processes. The planned expansion for PCHs and CGHs not only strengthens the country’s energy security but also contributes significantly to the transition to a low-carbon economy, aligning Brazil with global sustainable development goals.
