According to Brazilian academics Gláucia Fernandes, Matheus Ayello, Joo Henrique de Azevedo, and Felipe Gonçalves, Brazil has the potential to become one of the world’s largest green hydrogen producers due to its renewable electrical grid. Green hydrogen has a range of industrial applications, from agriculture to fuel replacement, and can be used as an energy vector to store renewable energy.
The cost of renewable sources is a crucial factor in making green hydrogen competitive, as power accounts for 80% of CAPEX. Brazil’s high energy prices mean that energy contracting business models need to be considered to ensure that the source used doesn’t cost more than $25 US/MW. Brazil also tracks the energy source used by contracts supporting business models for green hydrogen generation.
Producing green hydrogen using electrical energy from offshore wind sources is a viable option that could give Brazil a competitive edge. By using all of Brazil’s anticipated offshore wind energy for H2V production, the country may be able to meet up to 40% of Europe’s energy demand, replacing Russia by 2040.
Water usage is also an important consideration when discussing green hydrogen, as a significant volume is required during the production process. Reusing polluted aquifers and sea water are viable options, and H2V can be made from water unfit for human consumption. By collecting this water, the source is regenerated, as contaminating water is removed from the system.
Brazil has a significant potential to differentiate itself in the green hydrogen market. A strategic perspective is required to establish a hydrogen economy that complements other sources of the energy matrix. Important steps have been taken, such as the passage of PL 725/22 proposed by Senator Jean Paul Prates and Resolutions No. 2 and No. 6 of the National Energy Policy Council (CNPE).
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The creation of government and private financing lines, combined with close international cooperation, will be essential in developing green hydrogen. Clear and consistent regulatory regimes are needed to attract private investment. The World Bank Group recently unveiled the Hydrogen for Development Partnership (H4D), a global program aimed at promoting the deployment of low-carbon hydrogen in poor nations. Brazil is well-positioned to research and benefit from this scenario.