Green hydrogen: energy source for Brazilian northeast

Brazil has progressively become the focus of regional attention on renewable energy generation and the energy transition. The use of its extensive hydrographic basins (Amazon, São Francisco and Paraná) has allowed it to develop one of the cleanest energy matrices in the world, with more than 68% of its electricity produced in hydroelectric plants. However, the range of renewable energy goes beyond water origin, with accelerated progress being observed in other alternative sources, such as solar or wind, which already provide more than 22% of the country's total electricity.

The growth base of these new energy sources is located in the Northeast region. Due to its strategic position, with good winds and abundant sunshine throughout the year, the Northeast has become a fundamental player in electricity generation from renewable sources. 68% of all solar and wind energy in Brazil is produced in the region. Only the states of Rio Grande do Norte and Bahia concentrate 60% of the national wind generation power, adding more than 2,800 wind turbines in their territories, according to data from the ABEEólica.

Amid these results, the Northeast has managed to achieve, in aggregate, its full energy supply from renewable sources. As of February 15, 2024, the weekly report of the National Electric Energy Operator pointed out that the production of clean electricity (hydro, wind and solar) in the Northeast (15,439 MWmed) exceeded the entire consumption load that occurred in that period (13,114 MWmed), being the only territory in Brazil with the capacity to “export” energy clean towards the rest of the regions. Although these results already position the Northeast at the forefront of the national energy transition process, the region also presents great comparative advantages for developing green hydrogen: “the fuel of the future.”

Hydrogen is called to be one of the pillars of energy decarbonization worldwide in the coming decades. Energy from hydrogen is extremely advantageous, given the abundance of this chemical element on the planet and its compatibility with the environment by not emitting CO2 or leave negative residues in the air in its generation process. However, this energy can be highly polluting if the electricity used in the hydrogen vector separation process comes from polluting energies, such as gray hydrogen (fossil) or blue hydrogen (coal).

Here green hydrogen gains relevance, to the extent that its process only uses energy from renewable sources. Given its versatility, this substance is a viable alternative for highly energy-intensive production processes, where the reduction of carbon emissions is difficult to achieve, such as air and naval transport, fertilizer production, metallurgy or cement manufacturing. and steel.  

The Brazilian Northeast, with its favorable natural conditions and capacity to generate clean energy, has great potential to configure a green hydrogen production hub. The region has an enormous coastline that, in addition to facilitating the intrinsic process of hydrolysis, houses one of the most important port networks in the country, with the greatest national geographic proximity to the important European markets that consume this type of fuel.

In January 2023, the state of Ceará marked a historic milestone by witnessing the production of the first green hydrogen molecule carried out in the country. This achievement was part of the Research and Development project of the Pecém Thermoelectric Complex (UTE Pecém), which seeks to generate clean fuel with a guarantee of renewable origin. This step, without a doubt, positioned Ceará, and the entire Northeast, at the forefront of knowledge in the area of ​​Brazilian renewable hydrogen.

The development of the green hydrogen industry can be the key to the socioeconomic transformation of the Northeast, based on an economic model of greater growth, capable of generating jobs and closing the social gaps suffered by its inhabitants. In contrast to its energy riches, the Northeast is one of the poorest and most unequal regions of the country, with a high concentration of income (the second highest in the country, according to the GINI index of income), low productivity (the most low among all regions of Brazil), high poverty ratios and important gaps in health and education indicators compared to the rest of the country's regions. Although the quality of life of northeasterners has been improving in recent years, the region still presents the least favorable socioeconomic indicators in the country.

Although the green hydrogen market is still in an initial stage on a global scale, its growth seems irreversible, taking into account that it constitutes, perhaps, the most promising alternative to replace fossil fuel as the main means of energy. The challenges that the northeastern green hydrogen industry has to overcome to join this growth are important; from reducing its still high production cost (compared to gray or blue hydrogen), building an appropriate transportation and storage infrastructure, to establishing a regulatory framework that regulates the production and commercialization of this market.

CAF-development bank of Latin America and the Caribbean closely follows the progress of the green hydrogen industry in the Brazilian northeast, taking into account that this region has been the nerve center of credit operations in the country, having maintained an active capillarity with more than 16 subnational entities, and considering that support for the region's energy transition constitutes a pillar of its corporate strategy. Consequently, promoting the production of green hydrogen through the financing of physical infrastructure, services or research projects will help the Northeast to overcome the obstacles inherent to the green hydrogen industry, and more importantly, reduce its great challenges. social, while it will contribute to the objective of making the continent's energy matrix even greener.