Column: Brazil’s hydropower relieves European gas squeeze

(Reuters) – Brazil has increased hydroelectric generation to near-record rates in 2022 and 2023 – reducing the need to import liquefied natural gas (LNG) and freeing cargoes to be redirected to ease the gas shortage in Europe.

Brazil’s total electrical generation rose by +21 billion kilowatt-hours (kWh) to a record 677 billion kWh in 2022, according to data from the U.K. Energy Institute (“Statistical review of world energy”, 2023).

The country recorded massive increases in generation from hydro (+64 billion kWh), solar (+13 billion kWh) and wind farms (+9 billion kWh).

As a result, there was a sharp decline in thermal generation (-66 billion kWh) including gas (-45 billion kWh), oil (-10 billion kWh), coal (-8 billion kWh) and biomass (-3 million kWh).

Chartbook: Brazil hydro and gas-fired generation

Gas-fired units are the principal alternative to hydro so increased hydro has a direct impact on the volume of gas consumed by the power sector.

Hydro power was +43 billion kWh (+11%) above the prior ten-year average in 2022 and the highest for any year since 2011.

In consequence, gas-fired generation was -24 billion kWh (-37%) below the prior ten-year average and the lowest since 2011.


Brazil relies on imports to cover more than a quarter of its gas consumption – rising to almost half in years when gas generation is high.

Some gas is imported by pipeline from neighbouring Bolivia, but the rest arrives as LNG from the United States, with smaller amounts from other countries in the Atlantic Basin and Qatar.

LNG imports were reduced by 7.8 billion cubic metres (more than 77%) in 2022 compared with 2021 to the lowest level since 2017.

The largest drop came from the United States (-6.8 billion cubic metres) with smaller ones from Qatar (-0.8 billion) and Trinidad and Tobago (-0.3 billion).

Reduced demand from Brazil enabled all three suppliers to increase the number of cargoes sent to Europe in response to high prices.

Brazil’s surging hydro must be added to mild weather and reduced industrial consumption in Europe, and the diversion of LNG supplies from Asia, as one of the factors that helped Europe avert gas shortages in winter 2022/23.


Hydroelectric generation has increased even more in the first half of 2023, keeping demand for imported LNG low.

Total hydro climbed to a record 125 billion kWh in the first three months of 2023, up from 121 billion kWh in 2022, according to data from the National Electric System Operator.

Gas-fired generation fell to 3.88 billion kWh from 9.44 billion in 2022 and the lowest since 2012 (“Monthly bulletin for monitoring the electrical system”, Ministry of Mines and Energy, June 23, 2023).

Hydro is set to remain at record levels for at least the next few months given the enormous amount of water being stored behind the country’s major dams.

Dams in the Southeast and Midwest region, the most important subsystem of the national electricity interconnection, were storing the equivalent of 129 billion kWh at the end of June 2023.

The amount of stored energy was at a record high, up from 99 billion kWh at the end of June 2022 and a ten-year seasonal average of just 71 billion kWh.

With so much hydro potential available, the need to import expensive LNG will remain reduced, making extra volumes available for Europe and Asia through the remainder of 2023.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Powered by

Up ↑