In an effort to propel its energy transition and unlock new sectors, Brazil is targeting the passing of a regulatory framework for offshore wind and green hydrogen by the end of this year, according to the country's Energy Minister, Alexandre Silveira. As Latin America's largest nation, Brazil is keen to revamp its environmental credentials, which suffered under the administration of former President Jair Bolsonaro, and is now embracing the transition to a green economy as a cornerstone of its state-driven development policies.
As part of these ongoing efforts, Minister Silveira highlighted an upcoming auction for transmission lines, set to transport solar and onshore wind energy from Brazil's northeast to power stations in the southern regions of the country. With a minimum bid price of 16 billion reais ($41.79 billion), the auction has the potential to unlock a staggering 200 billion reais ($41.79 billion) in investments, he stated.
Presently, Brazil lacks legislation to regulate offshore wind and green hydrogen initiatives. However, in early January, the Brazilian government issued a decree that paved the way for the development of offshore wind power generation in the country. Notably, companies such as Shell and Equinor have already expressed their interest in this burgeoning sector.
“We believe that by the end of the year we will have a comprehensive regulatory framework in place for offshore plants, which we can present to the world,” Minister Silveira affirmed. He further added that his ministry also aims to establish regulations for green hydrogen projects within the same timeframe.
Minister Silveira emphasized, “Green hydrogen is a real possibility for us to significantly expand our position in clean and renewable energy.”
President Luiz Inacio Lula da Silva, a leftist leader, has placed great importance on driving Brazil's transition towards a green economy. This strategic shift comes at a time when the state-owned oil company, Petroleo Brasileiro, commonly known as Petrobras, faces challenges in replenishing its oil reserves.
Petrobras recently faced disappointment as environmental regulators dashed its hopes of exploring areas near the Amazon River, where the company sought to make its first major domestic oil discovery in over a decade.
Nevertheless, Minister Silveira expressed his belief that it remains crucial for Petrobras to explore the Foz de Amazonas, the location where the world's largest river meets the Atlantic Ocean, as long as the company adheres to environmental regulations.
Following the setback, Reuters reported that Petrobras may seek future growth opportunities abroad. When asked about this possibility, Minister Silveira stated that although the company still has much to accomplish in Brazil, it is not impeded from adopting a global perspective in its international strategy.
Additionally, Minister Silveira disclosed that the government is expected to make a decision this year regarding the recommencement of work on the Angra 3 nuclear plant. With an estimated cost of 20 billion reais ($4.18 billion), this endeavor presents a significant challenge, as the government must balance the need for energy security with the potential for increased costs for consumers.
