Researchers reveal opportunities to use green hydrogen in Brazil

Given the growth of new renewable energy sources, both domestically and worldwide, green hydrogen has been gaining ground and expanding its possibilities. In the context of the planet’s decarbonization in the pursuit of greater sustainability, green hydrogen is a clean and renewable energy source and one possible way to reduce carbon dioxide emissions.

According to FGV Energy researchers Gláucia Fernandes, Matheus Ayello, João Henrique de Azevedo and Felipe Gonçalves, Brazil has the potential to become one of the world’s largest producers of green hydrogen due to its natural advantages associated with a predominantly renewable power system.

Domestically, hydrogen could be used in various industrial sectors, from food to fertilizers, replacing carbon-intensive fuels. It could also be used to balance the power grid by absorbing renewable electricity in periods of high generation and low demand.

Competitiveness

For green hydrogen to be more competitive, it is extremely important for renewable sources to become cheaper, since electricity accounts for 80% of CAPEX. As Brazil has among the world’s highest power charges (CAMARGO, 2022), it is therefore crucial to consider electricity trading models that limit the price to US$25 per MW (CHIAPPINI, 2022). One advantage that Brazil has is that the power sources used in contracts are tracked. This favors business models based on green hydrogen production.

There is also a trend to use power from offshore wind sources to produce green hydrogen. This arrangement could give Brazil a major competitive edge. If all expected offshore wind output in Brazil is used to make green hydrogen, the country could supply up to 40% of European energy demand by 2040, the same share currently supplied by Russia (FIERN, 2022).

Water use

Water is an important issue when it comes to green hydrogen, as a lot is used in the production process. In addition to sea water, it is possible to consider reusing polluted aquifers. Water that is unfit for human consumption can be used to make green hydrogen, thereby dealing with polluted water. This could be done in Brazil.

The country has great potential to stand out in this market, given its competitive advantages. However, strategic orientation is required to develop a hydrogen economy in harmony with other energy sources. National Energy Policy Council (CNPE) resolutions 2 and 6 of 2022, as well as Bill 725 of 2022, authored by Senator Jean Paul Prates (Workers’ Party, Rio Grande do Norte), are important milestones in this process.

Bill 725 of 2022 would incorporate green hydrogen into the Brazilian energy system, establish a requirement to add it to gas pipelines, and assign sole responsibility for regulating this fuel to the National Oil, Natural Gas and Biofuels Agency (ANP). In turn, CNPE Resolution 6 of June 23, 2022, created the National Hydrogen Program and established its governance structure. On December 14, 2022, the Mining and Energy Ministry issued Ordinance 713/GM/MME, providing for a public consultation to examine its Three-Year Plan for the National Hydrogen Program.

Hydrogen development

Hydrogen development involves close international cooperation coupled with the provision of public and private sector funding lines. Thus, it requires transparent and consistent regulatory frameworks to attract private investment. The World Bank Group recently announced the creation of the Hydrogen for Development Partnership (H4D), a global initiative to drive the deployment of low-carbon hydrogen in developing countries.

“All these efforts are justified by increased energy security and a reduced need for imported inputs, in addition to scientific and technological development, the creation of new jobs, workforce training and the country’s incorporation into the new international market,” the FGV Energy researchers write.