Coal clings on in renewable energy leader Brazil as Candiota plant keeps town afloat

One of Brazil’s last coal plants, located in Candiota in the southern state of Rio Grande do Sul, roared back to life in July 2025 after a major business group invested millions to keep its turbines running.

Owned by Ambar, controlled by billionaire brothers Wesley and Joesley Batista, the plant continues to supply electricity even though Brazil generates over 80% of its power from renewable sources.

The plant is central to the local economy. Fernando Luiz Zancan, president of the Brazilian Sustainable Carbon Association, said:
"Candiota has the third-highest per capita GDP in the state… anything that happens in the coal industry affects mining, power generation, and cement, leading to unemployment and chaos in the region."

Mayor Luiz Carlos Folador emphasized the cultural and economic importance of the plant: "Here we have 1.5% of energy from coal. It is the dream of the people to be able to work."

Social worker Graca dos Santos Araujo da Silveira added:
"Most people in this city have lost sleep because everything here revolves around this plant. You cannot suddenly close a plant and change the lives of so many people overnight."

Coal’s Role in Brazil’s Energy Mix

Candiota and five other coal plants still produce 3% of Brazil’s electricity, helping meet demand during peak hours when solar and wind generation declines. After its government contract expired, the plant sold energy on the spot market, providing a lifeline to local residents and businesses.

Recently, Brazil’s Congress approved a bill extending domestic coal plant contracts until 2040, though President Luiz Inácio Lula da Silva could still veto it.

Global Context and Energy Transition Challenges

Brazil, host of COP30, is urging nations to transition away from fossil fuels. Lula noted at the summit that global crises, such as the war in Ukraine, have contributed to reopening coal mines.

Yet, interest groups and local economic dependence on coal make a rapid transition challenging. Ambar’s operations illustrate a broader global pattern seen in countries like India and South Africa, where coal remains entrenched despite climate goals.

The uncertain future of coal plants like Candiota leaves residents anxious about their livelihoods, with potential job losses affecting 10,000 people across mining, power generation, and related industries.

Local voices emphasize the need for a gradual and fair energy transition:
"The life of the plant needs to be extended so that a just energy transition can happen. It’s not fair to leave an entire population without work," said Graca dos Santos.

Currently, Lula’s government has no concrete transition plan for Candiota or other coal plants, leaving the region dependent on coal for the foreseeable future.

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