Brazil has one of the most extraordinary renewable energy potentials on the planet. We have thousands of kilometers of coastline for offshore wind, some of the highest solar irradiation levels in the world, and a hydroelectric system that has anchored our grid for decades. According to the 2025 National Energy Balance (BEN 2025), our electricity matrix is already 88.2% renewable – hydro, wind, solar and biomass combined. Few countries on Earth can already claim anything close to that. We are, by almost any measure, a global leader in clean energy.
And yet we keep paying for coal.
Here’s the part that should make every Brazilian furious: coal is not just dirty, it’s expensive. While generating electricity from wind, solar and hydro power costs roughly R$400 per megawatt-hour, electricity from thermal plants, which burn coal, gas or oil, can cost more than R$700 per megawatt-hour.
We are sitting on some of the cheapest clean energy resources in the world, and government policy keeps propping up the most expensive, most polluting option instead.
This shows up directly on our electricity bills through Brazil’s tariff flag system (bandeiras tarifárias). When hydro reservoirs run low and expensive thermal plants have to be switched on to cover the gap, the National Energy Agency (ANEEL) raises the flag to yellow or red. Under a yellow flag, consumers pay a surcharge, currently around R$1.88 for every 100 kWh consumed. This is specifically to cover the cost of running coal and gas plants. In 2021, during the worst drought in 91 years, that surcharge hit R$14.20 per 100 kWh and stayed in place for eight months straight, hitting those most vulnerable the hardest, and eating up a good portion of household budgets.
A Vicious Circle
The droughts that trigger red or “water scarcity” flags and force coal plants back online are worsened by the same fossil fuel emissions that drive climate change. Coal combustion releases greenhouse gases that contribute to the extreme lack of rainfall affecting river basins and reservoirs. Brazilians are paying a premium for coal-generated electricity because of a climate crisis that coal itself is helping to intensify. It is, quite literally, a system that perpetuates its own dependence.
This isn’t incompetence. It’s a choice shaped by relentless fossil fuel lobbying.Even the Ministry of Mines and Energy’s National Energy Transition Plan projects that coal and gas will remain at current levels until 2055. In 2025, Congress renewed coal subsidies until 2040, with little resistance from the government.
We are a clean energy champion, yet we are contractually committed to subsidizing fossil fuels for the next 16 years. Electricity bills are expected to rise almost 8% this year, well above inflation, and the higher cost of thermal generation is a direct driver of that increase.
These subsidies are not free money; their costs are ultimately passed on to consumers through electricity bills, alongside the red flag surcharges. Brazilians are paying twice for a system that’s already mostly renewable: once through general subsidies to keep zombie coal plants alive, and again through emergency surcharges when those same plants get switched on. We pay, they profit.
We Need to Vote the Contradiction Out
Brazil has proven that clean energy can work at scale. We have already built a power system in which renewables account for 88.2% of the energy mix, with generation costs far lower than fossil fuel alternatives. Instead of being a global model for transition, we’re paying a premium to keep alive the very fuels we’re supposed to be abandoning, while those same fuels intensify the droughts that make coal even more difficult to justify.
This is happening against an international backdrop of accelerating pressure. In late April of this year, 57 countries gathered in Santa Marta, Colombia, for the first conference dedicated exclusively to planning the end of fossil fuels. The summit was notable for including Indigenous peoples, unions, youth, Afro-descendant communities and activists as active participants in the discussions, with their demands reflected in the final declaration. It marked a structural shift in how climate decisions get made. The world is moving to plan an exit from fossil fuels, while Brazil is locking in coal and gas through to 2055.
With Brazil’s national elections approaching in October 2026, pressure to move away from expensive, polluting fossil fuels needs to reach the ballot box. The choice for candidates is clear: keep propping up uneconomic coal plants that deepen the very climate risks used to justify them, or invest in the renewable future Brazilians have already built and deserve.
