AbstractThe generation and diffusion of innovations in the Brazilian power sector are discussed, emphasizing the role played by some of the most important actors: suppliers of materials and equipment, power utilities and the Eletrobrás Research Center (CEPEL), which is the largest R&D institution for the development of electricity-related innovations in Brazil Lack of coordination between the actors induces inefficiencies such as duplication of R&D efforts, sub-optimal levels of R&D expenditure, low quality-standards for operating plant and equipment, and inefficient electricity end-use. A revision of the mechanisms of interaction between CEPEL, utilities and suppliers is therefore required Although significant innovations have been developed, in particular by CEPEL, an efficient technology strategy remains to be formulated and implemented.