As of 2018, renewable energy accounted for 79% of the domestically produced electricity used in Brazil.

Brazil relies on hydroelectricity for 65% of its electricity, and the Brazilian government plans to expand the share of wind energy (currently 11%), solar energy (currently 2.5%) and biomass as alternatives. Wind energy has the greatest potential in Brazil during the dry season, so it is considered a hedge against low rainfall and the geographical spread of existing hydroelectric resources.

Brazil held its first wind-only energy auction in 2009, in a move to diversify its energy portfolio. Foreign companies scrambled to take part. The bidding lead to the construction of 2 gigawatts (GW) of wind production with an investment of about $6 billion over the following two years. Brazil's technical potential for wind energy is 143 GW due to the country's blustery 7,400 kilometres (4,600 mi) kilometres coastline where most projects are based. The Brazilian Wind Energy Association and the government have set a goal of achieving 20 GW of wind energy capacity by 2020 from the current 5 GW (2014). The industry hopes the auction will help kick-start the wind-energy sector, which already accounts for 70% of the total in all of Latin America.

According to Brazil's Energy Master-plan 2016-2026 (PDE2016-2026), Brazil is expected to install 18,5GW of additional wind power generation, 84% in the North-East and 14% in the South.

Brazil started focusing on developing alternative sources of energy, mainly sugarcane ethanol, after the oil shocks in the 1970s. Brazil's large sugarcane farms helped the development. In 1985, 91% of cars produced that year ran on sugarcane ethanol. The success of flexible-fuel vehicles, introduced in 2003, together with the mandatory E25 blend throughout the country, have allowed ethanol fuel consumption in the country to achieve a 50% market share of the gasoline-powered fleet by February 2008.