In early September 2024, a delegation from Brazil’s ETR visited KAPSOM. Both parties engaged in in-depth discussions on the current state of Brazil’s energy market, the application of green ammonia in the country’s power sector, and its commercialization prospects.
Brazil’s Green Energy Transition
As global attention on climate change intensifies, Brazil is demonstrating significant potential for energy transition. Although hydropower has long dominated the country’s energy mix, the instability of power supply during dry seasons has accelerated Brazil’s efforts to develop solar and wind energy, with the abundant wind resources in the northeastern region emerging as a new growth driver. Technological advancements and decreasing costs have further supported the expansion of solar projects, attracting substantial international investment. At the same time, Brazil’s industrial and agricultural sectors are accelerating the adoption of green hydrogen and green ammonia to promote a low-carbon energy transition. The Brazilian government has set a target to achieve carbon neutrality by 2050 and is actively promoting renewable energy investments through various incentive policies.
Current Status of Green Energy Development
As of 2023, Brazil’s power grid has an installed generation capacity of 192 GW, which is expected to increase to 290 GW by 2029, driven primarily by the expansion of solar photovoltaic and wind energy. Concurrently, the growth of industrial electrification—such as aluminum and ammonia production—and the electric vehicle market are also contributing to rising electricity demand. Brazil’s mature renewable energy infrastructure and steadily growing power demand provide robust support for green ammonia production, laying a strong foundation for its future commercialization.
Currently, low-carbon power sources account for 90% of Brazil’s electricity grid, primarily derived from hydropower, wind, solar, biomass, and nuclear energy. The grid is divided into four interconnected regional markets, with the wind energy in the northeastern Pecém region playing a significant role. The widespread use of renewable energy ensures the stable operation of electrolysis equipment and complies with EU standards for renewable hydrogen production, effectively reducing the cost of green ammonia production.
Policy Advantages
In recent years, the Brazilian government has strongly supported the development of renewable energy through policies such as tax incentives, financing support, and regulatory improvements, further advancing the commercialization of green ammonia. Leveraging Brazil’s abundant solar photovoltaic and wind resources, the country has achieved significantly lower electricity production costs compared to other regions. With 100% renewable energy supply, the cost of electricity in Brazil is approximately $32 per MWh, far below the $88 per MWh seen in similar projects in the EU. By adopting a mixed energy strategy, electricity prices can be further reduced to $30 per MWh, with the Brazilian Hydrogen Bill bringing the cost down to $29 per MWh. Each $10 per MWh reduction in electricity costs translates to approximately $100 savings in ammonia production costs, highlighting Brazil’s competitive cost advantage in global green ammonia production.
During the visit, the ETR delegation and the KAPSOM team engaged in discussions on various topics, including technological collaboration, project development, and market expansion. We look forward to working closely with ETR to advance Brazil’s energy matrix towards a cleaner, more diverse, and more sustainable future, contributing to the global energy transition.
For more information about KAPSOM and its initiatives, please contact dongling@kapsom.com.
