Green boom due to renewable energies in Brazil

No wonder that Brazil has become one of the world’s most important growth markets for wind energy: only in China and the USA has more money been invested in this industry in the past seven years. Eleven percent of Brazilian electricity is now produced in wind farms – 20 gigawatts of installed capacity.

By 2024, capacities are expected to grow by more than half. In northeastern Brazil, where 60 million people live, the entire electricity demand was recently met by wind for the first time for several days. From there, electricity is increasingly being conducted to the industrialized southeast around São Paulo, where the reservoirs of the hydropower plants are in danger of running dry due to the drought.

Amazing green energy boom

Brazil’s green energy boom is amazing. After all, the government under President Jair Bolsonaro is best known for its attacks on environmental institutions and its ignorance of climate protection and the protection of the rainforests and the Amazon.

The previous governments also hesitated for a long time before promoting sustainable energies. Nevertheless, Brazil has one of the cleanest electricity production worldwide and the highest share of renewables (43 percent) in total final energy consumption among the 20 most important industrialized countries (G20).

European companies now also want to use this basis to achieve their climate goals, for example through the use of green hydrogen or “green steel” in Brazil. German companies are well positioned when it comes to climate conversion. The 230 turbines for the “Lagoa dos Ventos” wind farm were supplied by the German plant manufacturer Nordex.

This year, Siemens Gamesa also concluded delivery orders in Brazil for its world’s largest turbine, the X.5, with rotor sizes of up to 170 meters. The customer is the French energy giant Engie, who is building two gigantic wind farms in northeastern Brazil.

“The potential and breadth of renewable energies on offer in Brazil is unique in the world,” says Thomas Schulthess, Managing Director of Sowitec, a German project developer for renewable energies. Schulthess sees this as the decisive strategic advantage for the state to play a leading role in the global reduction of greenhouse gas emissions.

“It is a great opportunity for Brazil’s geopolitical repositioning in the global economy,” says Paulo Alvarenga, CEO of Thyssen-Krupp in South America. In his opinion, Brazil has everything it takes to become a location with the world’s cheapest green hydrogen costs. “Not in the distant future, but now soon.” International energy companies have announced projects for hydrogen plants in three ports in Brazil – with an investment volume of 22 billion dollars.

Diesel and electricity from sugar cane and ethanol

With 150 GW, Brazil ranks third in the world in terms of cumulative renewable energy capacity, behind China and the United States, according to the International Energy Agency. This is mainly due to the fact that almost two thirds of the electricity is generated in low-emission hydropower plants.

But Brazil has also been producing biodiesel from soy and ethanol from sugar cane for decades. Brazil’s sugar factories also generate electricity, which they feed into the grid. These systems alone produce as much energy as all hydropower plants in Switzerland combined. That makes Brazil number three in the world for the production of bio-electricity.

Biogas is also becoming more important in electricity generation, obtained from agricultural by-products or municipal landfills. The development of solar energy, which also has a great future, was neglected by Brazil for over 15 years. The Ministry of Energy expects that in 2040 around 44 percent of electricity in Brazil could be generated from wind and sun.
In contrast to competitors such as Australia or Chile, who are already further ahead than Brazil as producers and suppliers of green hydrogen on the world market, the Amazon region has, in addition to wind and sun, above all the biomass and enormous water supplies that these countries lack, says Schulthess .

The production of hydrogen with electricity from conventional energy sources such as gas or coal is still cheaper. But because of Brazil’s competitive green energy matrix with the world’s lowest wind power costs, production costs are likely to level out soon.

Felipe Ferrés, CEO of the wind turbine manufacturer Siemens Gamesa in Brazil, expects that Brazil’s hydrogen, which is generated with electricity from wind turbines, will be competitive with conventional hydrogen by 2030, five years earlier than worldwide.

Increase value creation in Brazil

But the branch does not want to be primarily a supplier of green hydrogen for industries worldwide. “We shouldn’t make the mistake of exporting hydrogen like ore,” says Paulo Emílio de Miranda, President of the Brazilian Hydrogen Association (ABH2). “It would be regrettable if Brazil helps decarbonise other countries, but doesn’t do it in their own country.” The companies in Brazil want to incorporate green hydrogen into their own production chain and increase added value in the country.

One example is “green” steel, which would be produced using hydrogen from renewable energies. The steel industry has one of the highest greenhouse gas emissions in the world. Car manufacturers, for example, want to soon be able to offer their customers vehicles made of green steel. Volvo in Brazil, for example, plans to sell the first trucks made of green steel in two years’ time. Australian mining company Fortescue Metals has plans to start producing green hydrogen in the port of Pecém in four years. Investment volume: six billion dollars to produce 15 million tons of hydrogen in 2030.

The Brazilian sugar and energy group Raizen has just agreed with the Norwegian fertilizer manufacturer Yara to supply biomethane as a substitute for natural gas from 2023. The group wants to use it to extract green ammonia for the production of nitrogen fertilizers. Raizen, a joint venture with Shell, is the second largest sugar company in the world and already number three as an energy company in Brazil.
The group produces so much electricity in biomass power plants, where it burns leftover sugar cane, that one half operates its entire 26 refineries and the other half feeds it into the grid. In the coming years, Raizen plans to connect 30 biogas plants to the grid to produce methane.

Bolsonaro as a threat to the green course

An oil multinational like Shell has also selected Brazil – along with Australia – as one of the two locations outside the industrialized countries in order to reduce its CO2 emissions. The oil company is now building the country’s first solar power plant – and wants to participate in offshore wind farms as soon as the regulations are in place.

Because of its biofuel, Brazil could also operate the entire logistics of its export industries in the future in a CO2-neutral manner. Take steel, for example: the iron ore is then brought in electrically powered trains from the ore mine in the interior of the country to the hydrogen-fired steelworks on the coast. Freighters traveling with green ammonia then bring the steel slabs to the port in Europe.
But the prospects for this future scenario are currently clouded by Bolsonaro’s errant course in environmental policy. “This knowledge has not really reached the government,” says Schulthess. “The private sector sees the potential and is still investing.”

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