Rivers of Diesel in the Amazon: Why does the region with Brazil's biggest hydroelectric plants still rely on expensive, dirty fuel?

The report highlights a paradox in the Legal Amazon: while the region hosts Brazil's largest hydroelectric plants and generates over 25.7% of national electricity, approximately four million of its residents lack access to the National Interconnected System (SIN). Around three million people rely on isolated systems, 97% of which are powered by expensive and polluting diesel fuel, while nearly one million people have no reliable public energy access at all. These isolated systems are heavily subsidized by the Fuel Consumption Fund (CCC), which reached an estimated value of over R$ 10 billion in 2022. The document finds that municipalities with isolated systems consistently perform worse across key socioeconomic indicators, including the Human Development Index and GDP per capita, compared to connected municipalities. To address this, the report recommends modifying auction rules to make renewables more competitive, incentivizing decentralized solar power, and improving the 'More Light for the Amazon' program through better oversight and community involvement.

• There is a significant disparity between the Legal Amazon's role as a national energy producer and its own internal energy access; the region generated 25.7% of Brazil's electricity in 2020 but consumed only 8.4% of the national total, yet over 14% of its population remains disconnected from the National Interconnected System (SIN).
• Approximately three million people in the Legal Amazon rely on isolated systems, 97% of which are thermal plants powered by diesel fuel, while nearly one million additional people lack full access to electricity, often relying on small diesel or gasoline generators for only a few hours per day.
• The high cost of diesel-based generation in isolated systems is subsidized by the Fuel Consumption Fund (CCC), which is funded by electricity consumers nationwide. In 2022, the CCC's estimated value exceeded R$ 10 billion, representing a per capita subsidy of more than R$ 3,000 for each consumer in an isolated system.
• Municipalities in the Legal Amazon that rely on isolated systems exhibit significantly worse socioeconomic outcomes than those connected to the national grid, including lower scores on the Municipal Human Development Index (MHDI), lower per capita GDP, higher illiteracy rates, and fewer medical facilities per person.
• The current auction model for service concessions in isolated systems favors diesel over renewables because it does not value environmental criteria and fails to account for the lower long-term operating costs of renewables compared to their higher initial acquisition costs.
• The 'More Light for the Amazon' program, designed to provide renewable energy to remote communities, is criticized for lacking a clear implementation timeline, effective monitoring, penalties for non-compliance by distributors, and sufficient interaction with local communities.

APA

Climate Policy Initiative (2022). Rivers of Diesel in the Amazon: Why does the region with Brazil's biggest hydroelectric plants still rely on expensive, dirty fuel? https://www.climatepolicyinitiative.org/publication/rivers-of-diesel-in-the-amazon-why-does-the-region-with-brazils-biggest-hydroelectric-plants-still-rely-on-expensive-dirty-fuel/

Chicago

Climate Policy Initiative. Rivers of Diesel in the Amazon: Why does the region with Brazil's biggest hydroelectric plants still rely on expensive, dirty fuel? 2022. https://www.climatepolicyinitiative.org/publication/rivers-of-diesel-in-the-amazon-why-does-the-region-with-brazils-biggest-hydroelectric-plants-still-rely-on-expensive-dirty-fuel/.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=Rivers of Diesel in the Amazon: Why does the region with Brazil's biggest hydroelectric plants still rely on expensive, dirty fuel? |date=3 June 2022 |url=https://www.climatepolicyinitiative.org/publication/rivers-of-diesel-in-the-amazon-why-does-the-region-with-brazils-biggest-hydroelectric-plants-still-rely-on-expensive-dirty-fuel/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2022rivers, author = {{Climate Policy Initiative}}, title = {{Rivers of Diesel in the Amazon: Why does the region with Brazil's biggest hydroelectric plants still rely on expensive, dirty fuel?}}, institution = {Climate Policy Initiative}, year = {2022}, month = jun, url = {https://www.climatepolicyinitiative.org/publication/rivers-of-diesel-in-the-amazon-why-does-the-region-with-brazils-biggest-hydroelectric-plants-still-rely-on-expensive-dirty-fuel/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }