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In Brazil, thieves often get “charged” before a crime is discovered.  But no rights are being violated; quite the opposite, in fact. The local banditos are stealing electricity—using rogue wires to drain energy away from bill-paying customers. In some parts of the nation, fully 20 percent of power is purloined each year.

Now, all of that is about to change. Domestic utilities have a new investigative agent, located right on customer premises and working 24/7. They are using smart meters to monitor customer usage remotely. When demand from a customer is unusually high, they suspect—and frequently find—an illegal hookup.

In fact, smart meters have become so essential that smart grid investments in Brazil will reach $36.6 billion by 2022, according to a new study released by the Washington, DC-based Northeast Group, LLC. Utilities in Brazil will use the smart grid investments to help reduce electricity theft, improve the reliability of electric infrastructure, offer new pricing plans for customers, and drive economic growth.

What’s more, Brazil, with the fifth largest population in the world, is eager to upgrade its infrastructure in the run-up to the 2014 World Cup and the 2016 Summer Olympics, when it will be a featured player on the world stage.

Andre Pepitone da Nobrega, director of the national electricity regulator, Agencia Nacional de Energia Eletrica (ANEEL) , recently told Bloomberg (News - Alert) Businessweek that the smart meters may help utilities recoup as much as 8 billion reais (US$4.5 billion) a year.

The centerpiece of Brazil's smart grid plans is a target set by ANEEL, to deploy 63 million smart meters by 2021. Detailed regulations are expected within the next year and these will drive large-scale automated meter infrastructure (AMI) deployments across the country. In addition, distribution automation, home energy management, and other smart grid technologies are expected to flourish in Brazil over the coming decade.

“Establishing the regulatory framework will be the catalyst for large-scale AMI deployments,” the report predicts. “But even in advance of these regulations, Brazilian utilities have been very active in piloting AMI. Almost all of the utilities have piloted AMI in some form and five of the largest utility groups with non-technical losses above 14 percent found that AMI deployments can bring immediate benefits by reducing theft. Several Brazilian utilities are even already experimenting with full-scale 'smart city' concepts that leverage a number of smart grid applications, such as distributed renewable generation and sophisticated home area networks.”

Brazil's rapidly growing economy is straining the existing electric infrastructure and smart grid investments will be critical to address the many challenges facing the sector. As the country continues to grow, the reliability and energy savings benefits of the smart grid will become increasingly important.

“Brazil is a clear regional leader,” in smart grid development, commented Ben Gardner, president of Northeast Group. “Mexico is next in line.”