Engie Brasil negotiates partnerships for green hydrogen plants

Engie Brasil Energia is negotiating partnerships to integrate green hydrogen production projects in the states of Ceará, Bahia and Paraná, aiming to position itself in the new market for the technology that is beginning to develop in Brazil.

The studies of the French electric company involve projects for plants of the fuel produced from renewable electric energy with different capacities, ranging from 100 megawatts (MW), 150 MW, and 180 MW.

“(They are) Several initiatives, some will evolve and some will not. We need to be very active in these partnerships,” Engie Brasil Energia CEO Eduardo Sattamini told Reuters. According to him, the electric company has been talking to different agents, from state governments, equipment suppliers to shipping companies that could transport the fuel for export.

Green hydrogen emerges as an important alternative fuel in the energy transition process and has been attracting the attention of several companies, especially those in more polluting sectors that seek to decarbonize their operations, such as mining, petroleum and chemicals.

In Engie’s case, the company can insert itself in the green hydrogen chain as a supplier of renewable energy for production or even as a supplier of the fuel itself to clients seeking to reduce their carbon emissions, Sattamini said. “This is a way for us to get into hydrogen distribution…. But all this will emerge as the market exists,” he added.

In Brazil, several green hydrogen projects have begun to appear in the last year, mainly as a test of their possible applications in industry. Last week, the chemical company Unigel announced plans to build a fuel factory in the industrial hub of Camaçari (BA), with an initial investment of US$120 million, in one of the largest initiatives ever announced in the country for the technology.

In Sattamini’s view, green hydrogen has enormous potential, but still faces a challenging scenario to become viable. “The equation still doesn’t close (economically). There has to be someone willing to pay the price for hydrogen that justifies its green character,” he said, noting that the international market has shown itself to be more “receptive” to paying this premium.

Besides the partnerships, Engie Brasil is studying international bids to sell green hydrogen. The main initiative currently in the market is H2Global, of the German government. Sattamini says that these biddings will represent important “offtakers” (buyers) for the development of the green hydrogen chain, but he ponders that there are some uncertainties. He still doesn’t know, for example, what the requirements will be for the production of the fuel, or what will effectively be considered as “green hydrogen”.

Higher profit

Engie Brasil Energia reported this Tuesday (2/8) a net profit of R$ 395 million for the second quarter, 23.8% higher compared to the same period in 2021. The adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) of the French subsidiary Engie reached R$ 1.897 billion, an increase of 23.8% year-on-year.

According to the company, its quarterly results were positively impacted by higher prices and volumes of energy sold. In the period, the average price of energy sales contracts rose 6.9%, to 219.52 reais per megawatt-hour (MWh), while the volume of energy sold increased 7.9%, to 9,556 gigawatt-hours (GWh).