Atlas Renewable Energy has suspended plans for 1.5 gigawatts of new clean energy projects in Brazil, valued at approximately $1 billion, due to persistent power rejection by the national grid operator.
Speaking on the sidelines of the SNEC PV Power Expo in Shanghai, Carlos Barrera, Chief Executive of Atlas—a developer owned by BlackRock’s Global Infrastructure Partners unit—confirmed that construction schedules planned for last year and this year have been frozen. The decision follows a severe spike in grid curtailments, which hit rates of 15 to 25 per cent for the company’s operational assets during the June quarter.
Curtailment occurs when transmission networks lack the capacity to absorb available wind and solar energy, forcing grid operators to pre-emptively reject clean electricity. While international geopolitical volatility, including the war in Iran, has accelerated global desires for renewable energy independence, infrastructure constraints remain a severe bottleneck in major markets such as Australia, Japan, India, Chile, and Brazil.
The issue in Brazil is compounded by a complex wholesale power market structure. When the national grid operator curtails a developer’s output, the company is often legally required to purchase replacement electricity on the open spot market to meet its pre-existing power purchase agreements (PPAs).
“You’re being curtailed, but you’re buying energy at two times the cost,” Barrera stated. “That’s what’s been problematic.”
The structural risk to the sector was underscored last month by Fitch Ratings, which revised the credit outlooks to negative for 11 Brazilian renewable energy project finance vehicles. The ratings agency cautioned that systemic curtailment is likely to persist until 2030, weakening corporate cash flows, debt-servicing capabilities, and overall liquidity. Fitch data showed that average project curtailment rates jumped significantly, ranging from 7 to 25 per cent in 2025, up from 6 to 12 per cent in 2024.
The disconnect stems from a rapid influx of wind and solar installations that has severely outpaced the construction of high-voltage transmission lines, forcing several regional developers to scale back corporate operations and reduce headcounts. However, Barrera emphasized that the underlying issue extends beyond logistics.
“The real issue is overcapacity of solar,” Barrera noted. “Even if you fix all the transmission issues in Brazil, you’re still going to have overcapacity, you’re still going to have curtailment.”
With national elections scheduled for later this year, Atlas does not anticipate any regulatory or structural market design reforms before 2028. Nonetheless, the company forecasts that curtailment rates will gradually ease over the long term as the pace of new solar capacity additions moderates and domestic industrial energy demand catches up to regional supply.
