Hydropower Generation In Brazil To Contribute To Global Natural Gas Surplus

by | Feb 10, 2024 | Daily News, Environmental News

Home » Environmental News » Hydropower Generation In Brazil To Contribute To Global Natural Gas Surplus

In a significant development that underscores the growing influence of renewable energy, Hydropower generation in Brazil has led to a marked decrease in the country’s natural gas imports, contributing to an emerging surplus in the global gas market. According to the latest data from Brazil’s National Agency for Petroleum, Natural Gas and Biofuels, the country’s gas imports have plummeted to their lowest level in twenty years, reaching just 6.5 billion cubic metres in 2023. This represents a significant drop from 9 billion cubic metres in 2022 and a stark contrast to the 16.9 billion cubic metres recorded in 2021.

Hydropower Generation In Brazil To Contribute To Global Natural Gas Surplus

This downward trend in gas imports, consistent since 2015, was briefly interrupted in 2021 when a severe drought forced Brazil to rely more heavily on gas-fired power plants. However, the resurgence of Hydropower generation in Brazil in the following years, alongside the rapid expansion of wind and solar energy, has dramatically reduced the demand for thermal power.

Brazil’s electricity grid heavily depends on hydroelectric power, contributing to two-thirds and three-quarters of the country’s total electricity generation over the past five years. This reliance on hydroelectricity, supplemented by wind and solar energy, has relegated gas-fired and other thermal power plants to a backup role, primarily used to meet peak demands and compensate for seasonal variations in river flows.

Most of Brazil’s natural gas is imported via pipeline from Bolivia, with additional needs historically met through liquefied natural gas (LNG) imports, primarily from the U.S. and other sources in the Atlantic Basin. However, the significant decrease in LNG imports has alleviated pressure on the Atlantic Basin’s gas supplies, contributing to a decline in global gas prices since late 2022.

The resurgence of hydroelectric generation, which reached 445 billion kilowatt-hours in 2023, up from a low of 378 billion kWh in 2021, has been a key factor in reducing the need for gas-fired generation. This shift towards renewable energy sources has contributed to a decrease in Brazil’s gas imports and positioned the country as a contributing factor to the global natural gas surplus.

Integrating wind and solar energy into Brazil’s power grid has also played a crucial role in this transition. Wind energy, in particular, has seen a compound annual growth rate of 15% over the last five years, while solar energy has experienced an average annual growth rate of 71% since 2018. This rapid expansion of renewable energy sources is expected to continue displacing the need for fossil fuels, including natural gas, thereby further reducing Brazil’s reliance on gas imports and contributing to the availability of natural gas on the global market.

As Brazil continues to harness its abundant hydro, wind, and solar resources, the country not only moves closer to energy self-sufficiency but also plays a pivotal role in shaping the dynamics of the global energy market, particularly in natural gas supply and demand.

Also Read: Warm Winter And Droughts In Italy Pose A Threat To Crops: Farming Lobby

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