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Insufficient power grid limits connection of new ventures and drives away investors
Despite being a global leader in renewable energy sources, Brazil has been facing a silent obstacle: the inability of the power grid to meet the demand for green hydrogen projects. According to Eixos, investments are being held back by a lack of transmission infrastructure, which also threatens the expansion of data centers in the country.
Green hydrogen depends on improvements in the electrical system
Companies such as Solatio, Fortescue and Casa dos Ventos have been finding it difficult to advance their green hydrogen projects in Brazil. As revealed by Axes, the National Electric System Operator (ONS) has been rejecting requests for connection to the grid due to a lack of available capacity in strategic regions. This obstacle compromises the viability of the projects and puts at risk the country's position in the global hydrogen chain, which directly depends on renewable sources and stable electrical connection.
In addition to harming initiatives of clean energy, this barrier can also affect legal and regulatory predictability for investors, who require minimum guarantees for long-term investments. The current infrastructure does not keep up with demand, especially in the North and Northeast regions, which concentrate most wind and solar projects — the basis for the production of green hydrogen.
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Studies try to unlock connection capacity
To address this bottleneck, the Energy Research Company (EPE) must present a study to the Ministry of Mines and Energy by December, proposing the expansion of connection capacity by at least 4 gigawatts (GW), as published by Axes. The proposal will also include a schedule for hiring reinforcements in the National Interconnected System (SIN), in addition to the possible anticipation of authorizations for an additional 2 GW of connections.
The goal is to reduce technical obstacles and unlock projects that are ready to go ahead but are still awaiting authorization. According to the International Energy Agency (IEA), Brazil has unique natural conditions to lead the green hydrogen market, but it needs to overcome infrastructure limitations to fulfill this role.
Investments in data centers also feel the impacts
Another sector directly affected by the problem is data centers. The federal government launched the special Redata regime, with tax incentives to attract investments in the segment, but companies report difficulties similar to those in the hydrogen sector. Juan Landeira, from A&M Infra, told Axes that the main barrier to new digital ventures in the country is precisely the uncertainty regarding connection to the electricity grid — a factor that weighs on the decisions of large international operators.
Without a modern and reinforced network, the country may lose not only the chance to export hydrogen, but also to attract technology structures that demand high continuous energy power.
Hydrogen requires coordinated action between energy and regulation
The current situation reinforces the urgency of integrated policies between generations, transmission and regulation to enable the advancement of the hydrogen agenda in Brazil. Although there are promising initiatives, such as the EPE plans and the incentive for Redata, experts warn that without a systemic vision of the infrastructure, the country runs the risk of being left out of the new global green economy.
Sources like Axes and International Energy Agency reinforce that the moment demands quick decisions and strategic investments, under the risk of making unviable what could be a competitive advantage for Brazil in the energy market in the coming decades.
