Brazil could produce green hydrogen for $2.87/kg, says consultancy


From pv magazine Brazil

Sao Paulo-based consulting firm Clean Energy Latin America (CELA) has launched a green hydrogen production cost index that applies to several Brazilian states. The new tool was developed based on CELA’s own modeling and its experience with multiple H2V projects in Brazil. It said it will be updated every six months.

The cost index for producing green hydrogen in Brazil takes into account the nation’s unique characteristics, encompassing factors like taxation, renewable resources such as solar and wind energy used in electrolysis to separate hydrogen and oxygen from water, as well as logistical aspects including investment data for plants, operational expenses, and capital costs.

In its inaugural release, CELA’s LCoH Brazil Index reveals that it is currently feasible to manufacture green hydrogen in select strategic locations within Brazil at a levelized cost ranging from $2.87/kg to $3.56/kg. However, with optimization and incentives, these costs could potentially decrease to as low as $1.69/kg, making them highly competitive when compared to gray hydrogen derived from fossil fuels, known for its environmental impact.

Camila Ramos, the executive director of CELA, noted the index’s significance as a valuable tool for decision-making regarding investments in H2V (hydrogen-to-vehicle) plants in Brazil. She said that it provides greater certainty regarding the economic viability and attractiveness of such projects.

“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,” she said. “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 about the importance of new incentives for the production of green hydrogen in the country.”

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