Even with one of the cleanest electrical matrices in the world, with around 90% renewable sources, Brazil can still make a significant contribution to the global energy transition. This is the opinion of Rui Altieri, president of the Electric Energy Trading Chamber (CCEE). “One of our main homework assignments is to use all our potential to electrify other sectors,” he told DINHEIRO, citing the transportation, civil construction and industries in general as examples. To speed up the process, he argues that the country should invest in a new version of the Alternative Sources Incentive Program (Proinfa), which in 2002 benefited the production of biomass and Small Hydroelectric Plants (PCHs). The reissue, however, would be aimed at increasing the competitiveness of green hydrogen, a sustainable fuel that should have its first plant inaugurated in the country by the end of this year.
How does CCEE evaluate the pressure for the global energy transition?
We believe that the fuel for this stage of energy transition is natural gas. We have to replace polluting thermal power plants with less aggressive ones. But it is a transition. In the future, the expectation is that Brazil will not use any form of fossil fuel and that solar and wind sources will have such penetration in the energy matrix that hydroelectric plants will not even have space to use their full potential. Of course, for safety reasons, we must keep some thermals in operation, but the idea is that they are not necessary. From then on, there will be no more energy transition in the electricity sector, it will be complete.
And in other sectors?
One of our main homework is to use all our potential to electrify other sectors such as transport, civil construction and other industries, many of which are still dependent on fossil fuel. We have to increase the share of the use of solar and wind energy. But for us, natural gas is the fuel for the energy transition. Green hydrogen is the fuel of the future.
Doesn’t the growth in the supply of green hydrogen come up against certifications and market regulations in Brazil?
This is a problem not only in Brazil, but all over the world. We have many pilot projects in the country and there is an expectation that the first green hydrogen plant of reasonable size will start operating at the end of this year in Bahia. It will already be inaugurated with the Selo Verde do Brasil awarded by the CCEE, a guarantee that the project is really low carbon. Only we can give this guarantee because we are the only institution that has control over metering, consumption and member contracts — 14,000 companies including generators, distributors and large energy consumers (monthly consumption above R$ 160,000). We are also the coordinators of a global working group on energy certification and renewable hydrogen that is underway at the International Committee for the Production and Transmission of Electric Energy (Cigre), in France. This has immeasurable value both for the domestic market and for export.
Is there demand for Brazilian green hydrogen?
Market exists, both internal and external. However, we have to overcome some barriers for green hydrogen to reach a more competitive price. This same process happened with solar and wind energies when, in 2002, Brazil created an incentive program called Proinfa (Programa de Incentivo às Fontes Alternativas). At that time, the plan was to contract 1,000 megawatts (MW) of biomass and 1,000 MWh of Small Hydroelectric Power Plants (PCHs) in a bet that the government made to make these energies more competitive. Solar did not even exist at that time. And it worked out really well. Green hydrogen is being born now. Instruments and time are needed for the fuel to become more commercially attractive, since it already is environmentally attractive.
Another clean source that has been gaining momentum is biomass. How do you see this alternative?
Sugarcane mills already generate energy from biomass on a large scale, as a by-product of sugar and alcohol. In other markets there are still challenges. The pulp and paper industry, for example, produces black liquor, energy residue that was previously wasted. The thing is, he’s not competitive. Cost is the biggest barrier to energy growth from other renewable sources.
Doesn’t the distribution of renewable energy make scale-up unfeasible?
We have some challenges. Sugarcane biomass, for example, is a heavy, bulky material that has an associated cost and whose transport would need to be done with vehicles that were not powered by diesel.
What about the intermittency of solar and wind?
That’s not a problem, it’s a feature. Our reservoirs are large batteries that can store a considerable amount of energy. In addition, Brazil can work with energy complementarity. Sugarcane biomass, for example, has a characteristic that is very suitable for Brazil: the harvest begins in mid-April and lasts until mid-November, precisely the dry season. In this way, it complements the hydroelectric energy that suffers in these months, but we have energy abundance from November to May. In the case of solar or wind cells, last March the first hybrid complex was inaugurated in Paraíba. Here it is not possible to talk about lack or surplus. One is complementary to the other. And the best part: in the sertão of Paraíba, there are already projects for remuneration for the use of land for those who use it as energy farms.
Europe is already banning the purchase of energy produced on land that should produce food. How does this impact projects like the one in Paraíba?
This question arose in the production of alcohol, and I cannot give an opinion here. But in terms of electricity, we managed to track the entire generation and ensure that we are not competing with food production. The use of land by wind farms or solar farms in regions of the northeastern hinterland does not prevent the development of crops that, in most cases, are for subsistence. The model does not create a social problem, it helps with the solution, as it pays for land use.
But what about the environmental impact?
Every plant, whether hydroelectric, solar or wind, has an environmental impact that needs to be mitigated. In my opinion, the electricity sector does this well in general. When a project is not fully mitigated environmentally, it is socially compensated with the construction of schools, houses, sanitation structure.
How are the projections for the energy market?
The bottleneck that exists to increase the share of renewable sources is the low market growth that has not exceeded 2% in the last two years, while the historical average is 3% to 4%. For 2023, the expected increase is 2.6%, without considering distributed micro and mini generation. For the next five years, the indication is for annual growth of 3.2%, reaching 81,540 average MW at the end of the period.
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