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PTThe role of the electricity sector in the transition towards a low-carbon economy
Electrification plays a crucial role in the decarbonization of the economy by replacing fossil fuel-based energy sources with cleaner and more sustainable alternatives. According to the New Energy Outlook: Brazil report, published by BloombergNEF, it is estimated that electrification could contribute up to 55% of carbon emissions reductions by 2050. Therefore, there is a huge opportunity in efficiency and sustainability with the direct electrification of production processes, accelerating the transition to a low-carbon economy.
To advance this agenda, even in Brazil, a country with a predominantly renewable matrix, there are dilemmas and challenges. A major dilemma is how to promote sustainable energy generation. Renewable technologies are already abundant and cheap. The next step is to understand how to best apply them, avoiding social and environmental costs such as land desertification and the impact on biodiversity with the construction of large solar parks, in addition to the need for correct disposal of materials and recycling of waste.
However, for electrification to actually occur, the real challenge is the expansion and modernization of transmission and distribution networks, to efficiently and intelligently connect generating units to consumption centers, and add reliability and resilience attributes to the energy supply. To get an idea of the challenge, globally, according to the International Renewable Energy Agency, to meet the commitment to triple renewable generation by 2030, it is estimated that annual investments of approximately US$ 1.52 trillion in renewable generation and US$ 717 billion in grids per year will be necessary.
Without a robust and modern infrastructure, energy generated by renewable sources cannot be efficiently transmitted and distributed to consumers. Investing in transmission and distribution networks is, therefore, a crucial step towards achieving a more sustainable and resilient energy matrix.
This is the general perception of the sector in Brazil. Taking Minas Gerais as an example, Cemig will connect 7GW of distributed solar generation to its grid in the state. To achieve this and to increase the resilience of its network, Cemig is executing the largest investment plan in the company’s history, totaling R$59 billion by 2029. The investments in physical infrastructure are notable; the company is building 200 new substations by 2028, a 50% increase compared to the amount built over its more than 70 years of existence.
In addition to the points above, we are aware of the importance of each organization’s contribution to reducing its greenhouse gas emissions. Together with WayCarbon, we are carrying out the carbon inventory for 2024, which will help us to have greater clarity about our main emitting sources and essential inputs for acting on decarbonization actions. We also carry out climate risk analysis and respond to reporting programs such as CDP, generating greater transparency for stakeholders and seeking to ensure Cemig’s resilience in the long term.
