FGV Law School in Rio de Janeiro, part of Fundação Getulio Vargas, one of Brazil’s leading academic and policy research institutions, has produced one of the most comprehensive mappings to date of how Brazil’s Congress has dealt with the energy transition since the 1988 Constitution.
The study, titled Energy Transition: Definitions, Regulation and Legislative Activity in Brazil, was developed by FGV’s Center for Advanced Studies in Energy Transition. It analyzed more than 700 legislative proposals filed over the past four decades and traced how deputies and senators have gradually turned the issue into a priority on the legislative agenda.
The good news is clear: the energy transition has become a permanent part of Congress’s policy vocabulary. The weakness is also clear: the legislative response remains fragmented, reactive and heavily dependent on economic incentives. In short, lobbying is strong, tax incentives are the preferred tool, and the dominant focus is on stimulating power generation, especially solar energy.
The study combined historical review, regulatory analysis and empirical research. Researchers used legislative data mining, thematic classification, machine-learning tools, expert reading and peer review to organize proposals related to biofuels, solar, wind, hydro, nuclear, low-emission hydrogen and ocean energy.
The energy transition has, in fact, moved well beyond the margins of congressional debate. Legislative activity has grown over more than three decades, with peaks linked to energy crises such as Brazil’s 2001 power rationing episode, international climate pressure, regulatory changes and technological advances. This shows that Congress now sees energy as a cross-cutting issue — economic, industrial, fiscal, technological and geopolitical.
But the logic behind this legislative activity matters. Congress has preferred to push the transition through economic incentives rather than through more traditional tools of command, control and planning. The study identified 153 proposals aimed at fostering clean energy and 113 focused on creating tax benefits. That preference reveals a familiar trait of Brazilian economic policy: when facing a structural transformation, the default response is often to create special regimes.
Incentives can be useful when they correct market failures or reduce risk in emerging technologies. But without deadlines or clear obligations, they can become permanent costs, distort competition and shift the bill to consumers or taxpayers.
The FGV study, whose diagnosis is endorsed in the foreword by Jerson Kelman, former head of both Brazilian electricity regulator Aneel and water agency ANA, also points out that projects driven by specific interests have increasingly competed for space with more systemic policies.
The issue is not sector representation, which is normal in any democracy. The problem arises when the sum of private demands replaces a collective energy strategy. The result can be unnecessary subsidies, overlapping programs, higher charges and operational dysfunctions in the power sector.
Another conclusion is that solar energy has become the main technological focus of the legislative agenda. Photovoltaic power appears in 153 proposals, ahead of biofuels, with 120, and wind power, with 56. The figure reflects the rapid expansion of distributed generation in Brazil and the growing interest of consumers, investors and companies in solar energy.
But it also exposes an imbalance: solar promotion receives more attention than less popular but equally decisive issues such as grid expansion, storage, system flexibility and affordable tariffs.
That imbalance also appears in the way Congress frames the energy transition. Legislative proposals focus more on expanding generation than on reducing or reshaping consumption. The most recurring themes are support for clean energy, self-generation and the expansion of production. Energy efficiency, demand response, consumption rationalization, storage and flexibility appear with less force.
This distinction matters because the next phase of Brazil’s power sector will not be solved by adding megawatts alone. A system with more solar and wind needs to handle intermittency, peak-hour demand, transmission bottlenecks, curtailment and economic signals capable of guiding consumption.
The broader reading is that Brazil has a real energy advantage, but risks wasting it if it treats the transition as a collection of fiscal exceptions. The country’s power matrix has long been renewable, anchored in hydropower. Brazil’s transition, therefore, does not start from coal. It starts from water.
The challenge is to diversify that renewable base — which is exposed to droughts and water scarcity — with solar, wind, biomass, biofuels, storage and more flexible grids, without turning every new technology into a new counter for benefits.
Brazil must decide whether it wants to reward specific technologies or systemic outcomes: lower emissions, greater supply security, lower total costs, higher efficiency, more resilience and stronger industrial competitiveness.
Congress has legislated extensively on the energy transition over the past few decades. Now it needs to prove it can legislate better.
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