AES Brasil is considering participating in the green hydrogen industry beyond the energy supply

AES Brasil has been studying a broader participation in the green hydrogen industry, which goes beyond the supply of electricity for the production of renewable fuel, said this Friday (4) the CEO of the electric company, Clarissa Sadock.

“We are discussing with potential partners so that we can work on the process as a whole, both for energy generation and probably also for hydrogen… since even for fiscal reasons it makes sense to have integration between the two phases”, said the executive, during conference call on third quarter results.

She recalled that the generator is advancing with its first green hydrogen project in Brazil, having signed, in September, a pre-contract with the Pecém Industrial and Port Complex for a fuel production plant.

The pre-contract is an evolution of the memorandum of understanding that had been closed in December 2021, and allows the electric company to continue with technical and commercial feasibility studies for the production of up to 2 gigawatts (GW) of green hydrogen and up to 800 thousand tons of green ammonia per year.

The intention, according to Sadock, is to use the Ceará terminal to export its hydrogen production, mainly to European countries.

“We will work internally to develop this product… which is still more expensive than other types of hydrogen”, highlighted the CEO, adding that, in her view, government subsidies will be needed to make the renewable fuel economically viable.

Regulatory Agenda 2023

In the conference call, the executive also assessed that the year 2023 will be important for the regulatory agenda of the electricity sector, especially for the guidelines of modernization and opening of the free market contained in the bill (PL) 414, which is awaiting a vote in Congress.

She also highlighted the discussion on anticipating the renewal of water concessions, a topic also covered in PL 414.

According to the CEO of AES, this is an agenda that “makes sense” both for generators – who would keep assets in their portfolio for longer – and for the government, which would anticipate revenue that would only come in a few years. Sadock reinforced the company’s interest in renewing its water concessions, “depending on the conditions” that are offered.