By Brazil Stock Guide – Energy trading in Brazil saw a significant downturn in 2025, with the volume of energy exchanged on the free market dropping nearly 40% year-over-year. This decline is largely attributed to credit restrictions and the market’s struggle to adapt to structural changes in Brazil’s power grid, which have introduced daily volatility, particularly due to the rising share of solar energy generation.
Data from the Brazilian Energy Trading Platform (BBCE) indicates that between January and September, energy trading plummeted 37.2% to 307.341 terawatt-hours (TWh). Financially, the drop was smaller, with a 3% decrease to R$70.1 billion, sustained by higher energy prices. Solar energy, now Brazil’s second-largest source of power, has played a major role in the increased volatility. “The market has always dealt well with hydrological risks, but the complexity of the energy matrix has grown, and the factors causing volatility are now much more varied,” said Eduardo Rossetti, BBCE’s executive director.
While the shift toward solar energy is contributing to daily price fluctuations, credit restrictions, following the default of energy trader Gold Energia late last year, have made market participants cautious. Rossetti emphasized the importance of understanding the nature of these price fluctuations and whether the market can anticipate them, given the liquidity available. He also noted that the 2024 base comparison for energy trading was exceptionally strong due to severe drought and increasing power demand, which fueled price volatility.
The energy market in Brazil showed signs of recovery in October, as rainfall began to exceed expectations, bringing down prices below R$300 per megawatt-hour (MWh). Rossetti expects the fourth quarter to be more active in trading than last year, when market uncertainty caused by the Gold Energia default led to a virtual standstill. “We started seeing the maps showing more rain than expected, and we saw the trading activity pick up in early October,” he said.