Sao Paulo-based consulting firm Clean Energy Latin America (CELA) has taken a monumental step in advancing the green hydrogen frontier by launching a groundbreaking tool—the Green Hydrogen Production Cost Index for Brazil.
This index, designed to apply to multiple Brazilian states, promises to reshape the landscape of renewable energy by providing invaluable insights into the economic feasibility and competitiveness of green hydrogen projects.
CELA’s Green Hydrogen Production Cost Index is the result of meticulous modeling and extensive experience with various hydrogen-to-vehicle (H2V) projects across Brazil. This innovative tool, set to be updated biannually, is tailored to Brazil’s unique energy landscape. It factors in crucial elements, including taxation, renewable resources such as solar and wind energy employed in the electrolysis process to extract hydrogen from water, as well as logistical considerations encompassing plant investments, operational expenses, and capital costs.
The inaugural release of CELA’s LCoH (Levelized Cost of Hydrogen) Brazil Index unveils a remarkable reality—it is currently viable to produce green hydrogen in select strategic locations within Brazil at a levelized cost ranging from $2.87/kg to $3.56/kg. However, this is just the beginning. With optimization strategies and incentivization, these costs have the potential to plummet to an astonishingly competitive $1.69/kg, positioning green hydrogen as a formidable rival to gray hydrogen, notorious for its environmental impact.
Camila Ramos, the executive director of CELA, emphasized the index’s pivotal role in facilitating decision-making for investments in H2V plants in Brazil. It offers invaluable certainty regarding the economic viability and attractiveness of these pioneering projects. Ramos underscored the significance of selecting optimal project locations, aligning with the consumer market for green hydrogen, and considering the state’s technical and regulatory conditions. The index serves not only as a guide for project optimization but also as a clear signal to Brazilian authorities about the urgency of incentivizing green hydrogen production in the nation.
CELA’s Green Hydrogen Production Cost Index stands as a testament to Brazil’s commitment to sustainable energy solutions. With this game-changing tool in hand, the nation takes a bold stride towards realizing its green hydrogen potential, contributing to a cleaner, more sustainable future.
