BrazilBrazilian green hydrogen could cost less than $3 per kilogram
With green hydrogen production picking up steam in Brazil, it is currently feasible to manufacture the resource at a select few locations at a cost ranging from $2.87 per kilogram to $3.56 per kilogram.
These figures were published in a new cost index launched by Sao Paulo-based consulting firm Clean Energy Latin America (CELA), which determined prices of green hydrogen based on numerous factors.
The index analyzes Brazil’s available renewable resources, like wind and solar, which are used in the process of electrolysis to separate hydrogen from water. The index also looks at factors like operational expenses, cost of capital, taxation, and data on investment into hydrogen plants.
CELA’s cost index shows that Brazil’s green hydrogen prices are below the global average. While around $2.87 per kilogram is the current low end of the range of prices, the index states that the range may go even lower to $1.69–1.86 with better incentives for production.
“It is essential to choose the best location for the project, based on the consumer market for this green hydrogen and the technical and regulatory conditions of the state, which will make the difference in the financial viability of the project,” said Camila Ramos, executive director at CELA.
“The index can also be a great guide for the technical and financial optimization of a project and a very clear signal to the Brazilian authorities on the importance of new incentives for the production of green hydrogen in the country.”
Brazil currently has over 40 green hydrogen projects at various stages of development. Most of the projects are concentrated in the sun-soaked Northeast region of Brazil, where most of country’s solar plants are located. Brazil is looking to capitalize on the country’s incredible potential to produce large enough amounts of green hydrogen to eventually become a major exporter.
Green hydrogen is produced through the process of electrolysis using renewable energy sources, such as wind or solar power. That is opposed to grey and blue hydrogen, which are produced using fossil fuels like natural gas. For that reason, green hydrogen is a more sustainable and environmentally friendly resource and global efforts to transition towards cleaner energy solutions look towards leaning on this so-called ‘fuel of the future’.
Further reading: Clean hydrogen needs $9 trillion investment to meet net zero by 2050.
With Brazil’s progressive president Lula da Silva looking to advance the country’s energy transition and halt the destruction of the Amazon that is actively threatened by the expanding timber industry and other industries, sustainable hydrogen energy may begin to take on a star role.
A private-public pact signed earlier this year, known as the ‘Brazilian Pact for Renewable Hydrogen’, looks to bring together a diverse set of stakeholders that can make the country’s green hydrogen industry economically viable.
