Brazil Energy Market: Top Strategies for Success in Renewable Energy Transition" — why Europe should care now?

At the start of my career, I was fully immersed in Brazil’s telecom boom. But I still remember the first time I witnessed Europe opening up its electricity markets in the late 1990s. It was a moment of chaos and opportunity, where market rules were being created in real time, and early players set the foundation for what would become one of the most dynamic sectors in the region. That experience left a mark on me — and today, I see Brazil standing at a similar crossroads, but moving even faster than many in Europe realize.

Brazil currently has over 88 million electricity consumers, and nearly 39% of national demand already flows through the country’s free energy market, known as ACL (Ambiente de Contratação Livre). In 2024 alone, the number of consumer units in the free market grew to more than 64,500, and projections show that by mid-2025 this figure will surpass 70,000 — a 26% year-over-year increase (Financier Worldwide). This shift allows businesses and large consumers to negotiate supply contracts directly with generators or traders, breaking away from the standard model of buying electricity from local utilities. The result is more flexibility, competitive pricing, and strategic control over energy usage.

Regulation is evolving in parallel. Bill PL 414/2021 is set to fully open the electricity market to all consumers, including residential ones. In addition, Provisional Measure MP 1,300/2025 proposes expanding access to the free market for low-voltage consumers by 2026. These regulatory changes also address cost allocation, grid fees, and safeguards for small consumers (Mattos Filho). It’s a rare moment where legislation and market behavior are accelerating simultaneously.

Brazil is not starting from scratch. Europe’s experience offers a roadmap — and some clear lessons. When EU countries liberalized their electricity markets decades ago, a wave of innovation followed. Dynamic pricing, energy management systems (EMS), peer-to-peer trading, energy storage, and the rise of virtual power plants (VPPs) radically reshaped the sector (Bruegel Policy Brief). VPPs in particular stand out: by aggregating distributed generation, storage, and demand response, they function like flexible power plants that can balance the grid and generate revenue from flexibility services (Energy, Sustainability and Society).

Storage is becoming just as critical. In mature markets, batteries are now integrated into wholesale market bids, providing both load shifting and grid services. But to succeed, clear regulation is needed — something Europe continues to refine (Oxford Energy Forum). That said, not everything in Europe was seamless. Challenges like market fragmentation, the removal of regulated tariffs, and the need for greater physical interconnection across countries persist (Springer Journal on Energy Policy).

This is precisely why the timing in Brazil matters. The country is still building the rules, which means that early movers don’t just join the market — they help shape it. This is an opportunity to influence how pricing models work, how EMS and VPP platforms are integrated, and how storage is treated from both a commercial and regulatory perspective. It’s rare to enter a large, fast-growing market while the playbook is still being written.

There are several reasons why this moment is critical:

• Regulation is still flexible, offering a chance to influence market design

• The scale is massive and growing quickly, with clear demand signals from large consumers

• Competition is still relatively low, compared to what’s coming

• Historical parallels with telecom suggest that sectors undergoing liberalization attract capital fast — and energy is likely to be even bigger

Brazil is quietly undergoing an energy revolution. Its free market is expanding fast, and it has the potential not just to replicate what Europe did, but to leapfrog it with better tools, better timing, and smarter integration. Companies that understand this dynamic and move now will have the chance to lead — not follow — in one of the most strategic energy markets of the next decade.