Los Angeles will end use of coal-fired power

China Solar Grid Parity signals unsubsidized industrial and commercial PV, rooftop solar, and feed-in tariff guarantees competing with grid electricity and coal power prices, driven by cost declines, policy reform, and technology advances.

Key Points

Point where PV in China meets or beats grid electricity, enabling unsubsidized industrial and commercial solar.

✅ City-level analysis shows cheaper PV than grid in 344 cities.

✅ 22% can beat coal power prices without subsidies.

✅ Soft-cost, permitting, and finance reforms speed uptake.

Solar power has become cheaper than grid electricity across China, a development that could boost the prospects of industrial and commercial solar, according to a new study.

Projects in every city analysed by the researchers could be built today without subsidy, at lower prices than those supplied by the grid, and around a fifth could also compete with the nation’s coal electricity prices.

They say grid parity – the “tipping point” at which solar generation costs the same as electricity from the grid – represents a key stage in the expansion of renewable energy sources.

While previous studies of nations such as Germany, where solar-plus-storage costs are already undercutting conventional power, and the US have concluded that solar could achieve grid parity by 2020 in most developed countries, some have suggested China would have to wait decades.

However, the new paper published in Nature Energy concludes a combination of technological advances, cost declines and government support has helped make grid parity a reality in Chinese today.

Despite these results, grid parity may not drive a surge in the uptake of solar, a leading analyst tells Carbon Brief.

Competitive pricing

China’s solar industry has rapidly expanded from a small, rural program in the 1990s to the largest in the world, with record 2016 solar growth underscoring the trend. It is both the biggest generator of solar power and the biggest installer of solar panels.

The installed capacity of solar panels in China in 2018 amounted to more than a third of the global total, with the country accounting for half the world’s solar additions that year.

Since 2000, the Chinese government has unveiled over 100 policies supporting the PV industry, and technological progress has helped make solar power less expensive. This has led to the cost of electricity from solar power dropping, as demonstrated in the chart below.

In their paper, Prof Jinyue Yan of Sweden’s Royal Institute of Technology and his colleagues explain that this “stunning” performance has been accelerated by government subsidies, but has also seen China overinvesting in what some describe as a clean energy's dirty secret of “redundant construction and overcapacity”. The authors write:

“Recently, the Chinese government has been trying to lead the PV industry onto a more sustainable and efficient development track by tightening incentive policies with China’s 531 New Policy.”

The researchers say the subsidy cuts under this policy in 2018 were a signal that the government wanted to make the industry less dependent on state support and shift its focus from scale to quality.

This, they say, has “brought the industry to a crossroads”, with discussions taking place in China about when solar electricity generation could achieve grid parity.

In their analysis, Yan and his team examined the prospects for building industrial and commercial solar projects without state support in 344 cities across China, attempting to gauge where or whether grid parity could be achieved.

The team estimated the total lifetime price of solar energy systems in all of these cities, taking into account net costs and profits, including project investments, electricity output and trading prices.

Besides establishing that installations in every city tested could supply cheaper electricity than the grid, they also compared solar to the price of coal-generated power. They found that 22% of the cities could build solar systems capable of producing electricity at cheaper prices than coal.

Embracing solar

Declining costs of solar technology, particularly crystalline silicon modules, mean the trend in China is also playing out around the world, with offshore wind cost declines reinforcing the shift. In May, the International Renewable Energy Agency (IRENA) said that by the beginning of next year, grid parity could become the global norm for the solar industry, and shifting price dynamics in Northern Europe illustrate the market impact.

Kingsmill Bond, an energy strategist at Carbon Tracker, says this is the first in-depth study he has seen looking at city-level solar costs in China, and is encouraged by this indication of solar becoming ever-more competitive, as seen in Germany's recent solar boost during the energy crisis. He tells Carbon Brief:

“The conclusion that industrial and commercial solar is cheaper than grid electricity means that the workshop of the world can embrace solar. Without subsidy and its distorting impacts, and driven by commercial gain.”

On the other hand, Jenny Chase, head of solar analysis at BloombergNEF, says the findings revealed by Yan and his team are “fairly old news” as the competitive price of rooftop solar in China has been known about for at least a year.

She notes that this does not mean there has been a huge accompanying rollout of industrial and commercial solar, and says this is partly because of the long-term thinking required for investment to be seen as worthwhile.

The lifetime of a PV system tends to be around two decades, whereas the average lifespan of a Chinese company is only around eight years, according to Chase. Furthermore, there is an even simpler explanation, as she explains to Carbon Brief:

“There’s also the fact that companies just can’t be bothered a lot of the time – there are roofs all over Europe where solar could probably save money, but people are not jumping to do it.”

According to Chase, a “much more exciting” development came earlier this year, when the Chinese government developed a policy for “subsidy-free solar”.

This involved guaranteeing the current coal-fired power price to solar plants for 20 years, creating what is essentially a low feed-in tariff and leading to what she describes as “a lot of nice, low-risk projects”.

As for the beneficial effects of grid parity, based on how things have played out in countries where it has already been achieved, Chase says it does not necessarily mean a significant uptake of solar power will follow:

“Grid parity solar is never as popular as subsidised solar, and ironically you don’t generally have a rush to build grid parity solar because you may as well wait until next year and get cheaper solar.”

Policy proposals

In their paper, Yan and his team lay out policy changes they think would help provide an economic incentive, in combination with grid parity, to encourage the uptake of solar power systems.

Technology costs may have fallen for smaller solar projects of the type being deployed on the rooftops of businesses, but they note that the so-called “soft costs” – including installation and maintenance – tend to be “very impactful”.

Specifically, they say aspects such as financing, land acquisition and grid accommodation, which make up over half the total cost, could be cut down:

“Labour costs are not significant [in China] because of the relatively low wages of direct labour and related installation overhead. Customer acquisition has largely been achieved in China by the mature market, with customers’ familiarity with PV systems, and with the perception that PV systems are a reliable technology. However, policymakers should consider strengthening the targeted policies on the following soft costs.”

Among the measures they suggest are new financing schemes, an effort to “streamline” the complicated procedures and taxes involved, and more geographically targeted government policies, alongside innovations like peer-to-peer energy sharing that can improve utilization.

As their analysis showed the price of solar electricity had fallen further in some cities than others, the researchers recommend targeting future subsidies at the cities that are performing less well – keeping costs to a minimum while still providing support when it is most needed.

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Europe's Nuclear Energy Policy shapes responses to the energy crisis, soaring gas prices, EU taxonomy rules, net-zero goals, renewables integration, baseload security, SMRs, and Russia-Ukraine geopolitics, exposing cultural, financial, and environmental divides.

Key Points

A policy guiding nuclear exits or expansion to balance energy security, net-zero goals, costs, and EU taxonomy.

✅ Divergent national stances: phase-outs vs. new builds

✅ Costs, delays, and waste challenge large reactors

✅ SMRs, renewables, and gas shape net-zero pathways

As the Fukushima disaster unfolded in Japan in 2011, then-German Chancellor Angela Merkel made a dramatic decision that delighted her country’s anti-nuclear movement: all reactors would be ditched.

What couldn’t have been predicted was that Europe would find itself mired in one of the worst energy crises in its history. A decade later, the continent’s biggest economy has shut down almost all its capacity already. The rest will be switched off at the end of 2022 — at the worst possible time.

Wholesale power prices are more than four times what they were at the start of the coronavirus pandemic. Governments are having to take emergency action to support domestic and industrial consumers faced with crippling bills, which could rise higher if the tension over Ukraine escalates. The crunch has not only exposed Europe’s supply vulnerabilities, but also the entrenched cultural and political divisions over the nuclear industry and a failure to forge a collective vision. 

Other regions meanwhile are cracking on, challenging the idea that nuclear power is in decline worldwide. China is moving fast on nuclear to try to clean up its air quality. Its suite of reactors is on track to surpass that of the U.S., the world’s largest, by as soon as the middle of this decade. Russia is moving forward with new stations at home and has more than 20 reactors confirmed or planned for export construction, according to the World Nuclear Association.

“I don’t think we’re ever going to see consensus across Europe with regards to the continued running of existing assets, let alone the construction of new ones,” said Peter Osbaldstone, research director for power and renewables at Wood Mackenzie Group Ltd. in the U.K. “It’s such a massive polarizer of opinions that national energy policy is required in strength over a sustained period to support new nuclear investment.” 

France, Europe’s most prolific nuclear energy producer, is promising an atomic renaissance as its output becomes less reliable. Britain plans to replace aging plants in the quest for cleaner, more reliable energy sources. The Netherlands wants to add more capacity, Poland also is seeking to join the nuclear club, and Finland is starting to produce electricity later this month from its first new plant in four decades. 

Belgium and Spain, meanwhile, are following Germany’s lead in abandoning nuclear, albeit on different timeframes. Austria rejected it in a referendum in 1978.

Nuclear power is seen by its proponents as vital to reaching net-zero targets worldwide. Once built, reactors supply low-carbon electricity all the time, unlike intermittent wind or solar.

Plants, though, take a decade or more to construct at best and the risk is high of running over time and over budget. Finland’s new Olkiluoto-3 unit is coming on line after a 12-year delay and billions of euros in financial overruns. 

Then there’s the waste, which stays hazardous for 100,000 years. For those reasons European Union members are still quarreling over whether nuclear even counts as sustainable.

Electorates are also split. Polling by YouGov Plc published in December found that Danes, Germans and Italians were far more nuclear-skeptic than the French, British or Spanish. 

“It comes down to politics,” said Vince Zabielski, partner at New York-based law firm Pillsbury Winthrop Shaw Pittman LLP, who was a nuclear engineer for 15 years. “Everything political ebbs and flows, but when the lights start going off people have a completely different perspective.”

What’s Behind Europe’s Skyrocketing Energy Prices

Indeed, there’s a risk of rolling blackouts this winter. Supply concerns plaguing Europe have sent gas and electricity prices to record levels and inflation has ballooned. There’s also mounting tension with Russia over a possible invasion of Ukraine, which could lead to disrupted supplies of gas. All this is strengthening the argument that Europe needs to reduce its dependence on international sources of gas.

Europe will need to invest 500 billion euros ($568 billion) in nuclear over the next 30 years to meet growing demand for electricity and achieve its carbon reduction targets, according to Thierry Breton, the EU’s internal market commissioner. His comments come after the bloc unveiled plans last month to allow certain natural gas and nuclear energy projects to be classified as sustainable investments. 

“Nuclear power is a very long-term investment and investors need some kind of guarantee that it will generate a payoff,” said Elina Brutschin at the International Institute for Applied Systems Analysis. In order to survive in liberalized economies like the EU, the technology needs policy support to help protect investors, she said.

That already looks like a tall order. The European Commission has been told by a key expert group that the labeling risks raising greenhouse gas emissions and undermining the bloc’s reputation as a bastion for environmentally friendly finance.

Austria has threatened to sue the European Commission over attempts to label atomic energy as green. The nation previously attempted a legal challenge, when the U.K. was still an EU member, to stop the construction of Electricite de France SA’s Hinkley Point C plant, in the west of England. It has also commenced litigation against new Russia-backed projects in neighboring Hungary.

Germany, which has missed its carbon emissions targets for the past two years, has been criticized by some environmentalists and climate scientists for shutting down a supply of clean power at the worst time, despite arguments for a nuclear option for climate policy. Its final three reactors will be halted this year. Yet that was never going to be reversed with the Greens part of the new coalition government. 

The contribution of renewables in Germany has almost tripled since the year before Fukushima, and was 42% of supply last year. That’s a drop from 46% from the year before and means the country’s new government will have to install some 3 gigawatts of renewables — equivalent to the generating capacity of three nuclear reactors — every year this decade to hit the country's 80% goal.

“Other countries don’t have this strong political background that goes back to three decades of anti-nuclear protests,” said Manuel Koehler, managing director of Aurora Energy Research Ltd., a company analyzing power markets and founded by Oxford University academics. 

At the heart of the issue is that countries with a history of nuclear weapons will be more likely to use the fuel for power generation. They will also have built an industry and jobs in civil engineering around that.

Germany’s Greens grew out of anti-nuclear protest movements against the stationing of U.S. nuclear missiles in West Germany. The 1986 Chernobyl meltdown, which sent plumes of radioactive fallout wafting over parts of western Europe, helped galvanize the broader population. Nuclear phase-out plans were originally laid out in 2002, but were put on hold by the country's conservative governments. The 2011 Fukushima meltdowns reinvigorated public debate, ultimately prompting Merkel to implement them.

It’s not easy to undo that commitment, said Mark Hibbs, a Bonn, Germany-based nuclear analyst at Carnegie Endowment for International Peace, or to envision any resurgence of nuclear in Germany soon: “These are strategic decisions, that have been taken long in advance.”

In France, President Emmanuel Macron is about to embark on a renewed embrace of nuclear power, even as a Franco-German nuclear dispute complicates the debate. The nation produces about two-thirds of its power from reactors and is the biggest exporter of electricity in Europe. Notably, that includes anti-nuclear Germany and Austria.

EDF, the world’s biggest nuclear plant operator, is urging the French government to support construction of six new large-scale reactors at an estimated cost of about 50 billion euros. The first of them would start generating in 2035.

But even France has faced setbacks. Development of new projects has been put on hold after years of technical issues at the Flamanville-3 project in Normandy. The plant is now scheduled to be completed next year. 

In the U.K., Business Secretary Kwasi Kwarteng said that the global gas price crisis underscores the need for more home-generated clean power. By 2024, five of Britain’s eight plants will be shuttered because they are too old. Hinkley Point C is due to be finished in 2026 and the government will make a final decision on another station before an election due in 2024. 

One solution is to build small modular reactors, or SMRs, which are quicker to construct and cheaper. The U.S. is at the forefront of efforts to design smaller nuclear systems with plans also underway in the U.K. and France. Yet they too have faced delays. SMR designs have existed for decades though face the same challenging economic metrics and safety and security regulations of big plants.

The trouble, as ever, is time. “Any investment decisions you make now aren’t going to come to fruition until the 2030s,” said Osbaldstone, the research director at Wood Mackenzie. “Nuclear isn’t an answer to the current energy crisis.”

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Offshore Wind-to-Hydrogen Integration enables green hydrogen by embedding an electrolyzer in offshore turbines. Siemens Gamesa and Siemens Energy align under H2Mare to decarbonize industry, advance the Paris Agreement, and unlock scalable, off-grid renewable production.

Key Points

A method integrating electrolyzers into offshore wind turbines to generate green hydrogen and reduce carbon emissions.

✅ Integrated electrolyzer at turbine base for off-grid operation

✅ Enables scalable, cost-efficient green hydrogen production

✅ Supports decarbonization targets under Paris Agreement

To reach the Paris Agreement goals, the world will need vast amounts of green hydrogen and, with offshore wind growth accelerating, wind will provide a large portion of the power needed for its production.

Siemens Gamesa and Siemens Energy announced today that they are joining forces combining their ongoing wind-to-hydrogen developments to address one of the major challenges of our decade - decarbonizing the economy to solve the climate crisis.

The companies are contributing with their developments to an innovative solution that fully integrates an electrolyzer into an offshore wind turbine as a single synchronized system to directly produce green hydrogen. The companies intend to provide a full-scale offshore demonstration of the solution by 2025/2026. The German Federal Ministry of Education and Research, reflecting Germany's clean energy progress, announced today that the developments can be implemented as part of the ideas competition 'Hydrogen Republic of Germany'.

'Our more than 30 years of experience and leadership in the offshore wind industry, coupled with Siemens Energy's expertise in electrolyzers, brings together brilliant minds and cutting-edge technologies to address the climate crisis. Our wind turbines play a huge role in the decarbonization of the global energy system, and the potential of wind to hydrogen means that we can do this for hard-to-abate industries too. It makes me very proud that our people are a part of shaping a greener future,' said Andreas Nauen, Siemens Gamesa CEO.

Christian Bruch, CEO of Siemens Energy, explains: 'Together with Siemens Gamesa, we are in a unique position to develop this game changing solution. We are the company that can leverage its highly flexible electrolyzer technology and create and redefine the future of sustainable offshore energy production. With these developments, the potential of regions with abundant offshore wind, such as the UK offshore wind sector, will become accessible for the hydrogen economy. It is a prime example of enabling us to store and transport wind energy, thus reducing the carbon footprint of economy.'

Over a time frame of five years, Siemens Gamesa plans to invest EUR 80 million and Siemens Energy is targeting to invest EUR 40 million in the developments. Siemens Gamesa will adapt its development of the world's most powerful turbine, the SG 14-222 DD offshore wind turbine to integrate an electrolysis system seamlessly into the turbine's operations. By leveraging Siemens Gamesa's intricate knowledge and decades of experience with offshore wind, electric losses are reduced to a minimum, while a modular approach ensures a reliable and efficient operational set-up for a scalable offshore wind-to-hydrogen solution. Siemens Energy will develop a new electrolysis product to not only meet the needs of the harsh maritime offshore environment and be in perfect sync with the wind turbine, but also to create a new competitive benchmark for green hydrogen.

The ultimate fully integrated offshore wind-to-hydrogen solution will produce green hydrogen using an electrolyzer array located at the base of the offshore wind turbine tower, blazing a trail towards offshore hydrogen production. The solution will lower the cost of hydrogen by being able to run off grid, much like solar-powered hydrogen in Dubai showcases for desert environments, opening up more and better wind sites. The companies' developments will serve as a test bed for making large-scale, cost-efficient hydrogen production a reality and will prove the feasibility of reliable, effective implementation of wind turbines in systems for producing hydrogen from renewable energy.

The developments are part of the H2Mare initiative which is a lighthouse project likely to be supported by the German Federal Ministry of Education and Research ideas competition 'Hydrogen Republic of Germany'. The H2mare initiative under the consortium lead of Siemens Energy is a modular project consisting of multiple sub-projects to which more than 30 partners from industry, institutes and academia are contributing. Siemens Energy and Siemens Gamesa will contribute to the H2Mare initiative with their own developments in separate modular building blocks.

About hydrogen and its role in the green energy transition

Currently 80 million tons of hydrogen are produced each year and production is expected to increase by about 20 million tons by 2030. Just 1% of that hydrogen is currently generated from green energy sources. The bulk is obtained from natural gas and coal, emitting 830 million tons of CO2 per year, more than the entire nation of Germany or the global shipping industry. Replacing this current polluting consumption would require 820 GW of wind generating capacity, 26% more than the current global installed wind capacity. Looking further ahead, many studies suggest that by 2050 production will have grown to about 500 million tons, with a significant shift to green hydrogen already signaled by projects like Brazil's green hydrogen plant now underway. The expected growth will require between 1,000 GW and 4,000 GW of renewable capacity by 2050 to meet demand, and in the U.S. initiatives like DOE hydrogen hubs aim to catalyze this build-out, which highlights the vast potential for growth in wind power.

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Iran Power Outage Protests surge as electricity blackouts, drought, and a looming heat wave spark unrest in Tehran, Shiraz, and more, with chants against leadership, strikes, and sanctions-driven economic pressures mounting.

Key Points

Protests across Iran over blackouts, drought, and economic strain challenge authorities and demand accountability.

✅ Rolling blackouts blamed on drought, heat wave, and surging demand.

✅ Chants target leadership amid strikes and wage, water shortages.

✅ Legitimacy questioned after low-turnout election and sanctions.

There have been protests in a number of cities in Iran amid rising public anger over widespread electricity blackouts.

Videos on social media appeared to show crowds in Shar-e Rey near Tehran, Shiraz, Amol and elsewhere overnight.

Some people can be heard shouting "Death to the dictator" and "Death to Khamenei" - a reference to Supreme Leader Ayatollah Ali Khamenei.

The government has apologised for the blackouts, which it has blamed on a severe drought and high demand.

Elsewhere, similar outages have had political repercussions, as a widespread power outage in Taiwan prompted a minister's resignation earlier this year.

President Hassan Rouhani explained in televised remarks on Tuesday morning that the drought meant most of the country's hydroelectric power plants were not operating, placing more pressure on thermal power plants, and that electricity consumption had surged as people used air conditioning to cope with the intense summer heat.

"I apologise to our dear people who have faced problems and suffering in the past few days and I urge them to co-operate [by cutting their electricity use]. People complain about power outages and they are right," Mr Rouhani said.

A video that has gone viral in recent days shows a woman complaining about the blackouts and corruption at a government office in the northern city of Gorgan and demanding that her comments be conveyed to "higher-ups like Mr Rouhani". "The only thing you have done is forcing hijab on us," she shouts.

The president has promised that the government will seek to resolve the problems within the next two or three weeks.

However, a power sector spokesman warned on Monday that consumption was exceeding the production capacity of Iran's power plants by 11GW, and said a "looming heat wave" could make the situation worse, as seen in Iraq's summer electricity crunch this year.

Iranians have also been complaining about water shortages and the non-payment of wages by some local authorities, while thousands of people working in Iran's oil industry have been on strike over pay and conditions, as officials discuss further energy cooperation with Iraq to ease supply pressures.

There was already widespread discontent at government corruption and the economic hardship caused by sanctions that were reinstated when the US abandoned a nuclear deal with Iran three years ago, even as Iran supplies about 40% of Iraq's electricity through cross-border sales.

Analysts say that after the historically low turnout in last month's presidential election, when more than half of the eligible voters stayed at home, the government is facing a serious challenge to its legitimacy.

Mr Rouhani will be succeeded next month by Ebrahim Raisi, a hard-line cleric close to Ayatollah Khamenei who won 62% of the vote after several prominent contenders were disqualified, while Iran finalizes power grid deals with Iraq to bolster regional ties.

The 60-year-old former judiciary chief has presented himself as the best person to combat corruption and solve Iran's economic problems, including ambitions to transmit electricity to Europe as a regional power hub.

But many Iranians and human rights activists have pointed to his human rights record, accusing him of playing a role in the executions of thousands of political prisoners in the 1980s and in the deadly crackdowns on mass anti-government protests in 2009 and 2019.

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Ontario Comprehensive Electricity Plan delivers Global Adjustment reductions for industrial and commercial non-RPP customers, lowering electricity rates, shifting renewable energy costs, and enhancing competitiveness across Ontario businesses in 2022, with additional 4 percent savings.

Key Points

Ontario's plan lowers Global Adjustment by shifting renewable costs, cutting industrial and commercial bills 15-17%.

✅ Shifts above-market non-hydro renewable costs to the Province

✅ Reduces GA for industrial and commercial non-RPP customers

✅ Additional 4% savings on 2022 bills after GA deferral

As of January 1, 2022, industrial and commercial electricity customers will benefit from the full savings introduced through the Ontario government’s Comprehensive Electricity Plan, which supports stable electricity pricing for industrial and commercial companies, announced in Budget 2020, and first implemented in January 2021. This year customers could see an additional four percent savings compared to their bills last year, bringing the full savings from the Comprehensive Electricity Plan to between 15 and 17 per cent, making Ontario a more competitive place to do business.

“Our Comprehensive Electricity Plan has helped reverse the trend of skyrocketing electricity prices that drove jobs out of Ontario,” said Todd Smith, Minister of Energy. “Over 50,000 customers are benefiting from our government’s plan which has reduced electricity rates on clean and reliable power, allowing them to focus on reinvesting in their operations and creating jobs here at home.”

Starting on January 1, 2021, the Comprehensive Electricity Plan reduced overall Global Adjustment (GA) costs for industrial and commercial customers who do not participate in the Regulated Price Plan (RPP) by shifting the forecast above-market costs of non-hydro renewable energy, such as wind, solar and bioenergy, from the rate base to the Province, alongside energy-efficiency programs that complement demand reduction efforts.

“Since taking office, our government has listened to job creators and worked to lower the costs of doing business in the province. Through these significant reductions in electricity prices through the Comprehensive Electricity Plan, customers all across Ontario will benefit from significant savings in their business operations in 2022,” said Vic Fedeli, Minister of Economic Development, Job Creation and Trade. “By continuing to reduce electricity costs, lowering taxes, and cutting red tape our government has reduced the cost of doing business in Ontario by nearly $7 billion annually to ensure that we remain competitive, innovative and poised for economic recovery.”

As part of its COVID response, including electricity relief for families and small businesses, Ontario had deferred a portion of GA between April and June 2020 for industrial and non-RPP commercial customers, with more than 50,000 customers benefiting. Those same businesses paid back these deferred GA costs over 12 months, between January 2021 and December 2021, while the province prepared to extend disconnect moratoriums for residential customers.

During the pandemic, residential electricity use rose even as overall consumption dropped, underscoring shifts in load patterns.

Now that the GA deferral repayment period is over, industrial and non-RPP commercial customers will benefit from the full cost reductions provided to them by the Comprehensive Electricity Plan, alongside temporary off-peak rate relief that supported families and small businesses. This means that, beginning January 1, 2022, these businesses could see an additional four per cent savings on their bills compared to 2021, as new ultra-low overnight pricing options emerge depending on their location and consumption.

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Enegix Base One Green Hydrogen Plant will produce renewable hydrogen via electrolysis in Ceara, Brazil, leveraging 3.4 GW baseload renewables, offshore wind, and hydro to scale clean energy, storage, and export logistics.

Key Points

A $5.4bn Ceara, Brazil project to produce 600m kg of green hydrogen annually using 3.4 GW of baseload renewables.

✅ 3.4 GW baseload from hydro and offshore wind pipelines

✅ Targets 600m kg green hydrogen per year via electrolysis

✅ Focus on storage, transport, and export supply chains

In March, Enegix Energy announced some of the most ambitious hydrogen plans the world has ever seen. The company signed a memorandum of understanding (MOU) with the government of the Brazilian state of Ceará to build the world’s largest green hydrogen plant in the state on the country’s north-eastern coast, and the figures are staggering.

The Base One facility will produce more than 600 million kilograms of green hydrogen annually from 3.4GW of baseload renewable energy, and receive $5.4bn in investment to get the project off the ground and producing within four years.

Green hydrogen, hydrogen produced by electrolysis that is powered by renewables, has significant potential as a clean energy source. Already seeing increased usage in the transport sector, the power source boasts the energy efficiency and the environmental viability to be a cornerstone of the world’s energy mix.

Yet practical challenges have often derailed large-scale green hydrogen projects, from the inherent obstacle of requiring separate renewable power facilities to the logistical and technological challenges of storing and transporting hydrogen. Could vast investment, clever planning, and supportive governments and programs like the DOE’s hydrogen hubs initiative help Enegix to deliver on green hydrogen’s oft-touted potential?

Brazilian billions
The Base One project is exceptional not only for its huge scale, but the timing of its construction, with demand for hydrogen set to increase dramatically over the next few decades. Figures from Wood Mackenzie suggest that hydrogen could account for 1.4 billion tonnes of energy demand by 2050, one-tenth of the world’s supply, with green hydrogen set to be the majority of this figure.

Yet considering that, prior to the announcement of the Enegix project, global green hydrogen capacity was just 94MW, advances in offshore green hydrogen and the development of a project of this size and scope could scale up the role of green hydrogen by orders of magnitude.

“We really need to [advance clean energy] without any emissions on a completely clean, carbon neutral and net-zero framework, and so we needed access to a large amount of green energy projects,” explains Wesley Cooke, founder and CEO of Enegix, a goal aligned with analyses that zero-emissions electricity by 2035 is possible, discussing the motivation behind the vast project.

With these ambitious goals in mind, the company needed to find a region with a particular combination of political will and environmental traits to enable such a project to take off.

“When we looked at all of these key things: pipeline for renewables, access to water, cost of renewables, and appetite for renewables, Brazil really stood out to us,” Cooke continues. “The state of Ceará, that we’ve got an MOU with the government in at the moment, ticks all of these boxes.”

Ceará’s own clean energy plans align with Enegix’s, at least in terms of their ambition and desire for short-term development. Last October, the state announced that it plans to add 5GW of new offshore wind capacity in the next five years. With BI Energia alone providing $2.5bn in investment for its 1.2GW Camocim wind facility, there is significant financial muscle behind these lofty ambitions.

“One thing I should add is that Brazil is very blessed when it comes to baseload renewables,” says Cooke. “They have an incredibly high percentage of their country-wide energy that comes from renewable sources and a lot of this is in part due to the vast hydro schemes that they have for hydro dams. Not a lot of countries have that, and specifically when you’re trying to produce hydrogen, having access to vast amounts of renewables [is vital].”

Changing perceptions and tackling challenges
This combination of vast investment and integration with the existing renewable power infrastructure of Ceará could have cultural impacts too. The combination of state support for and private investment in clean energy offsets many of the narratives emerging from Brazil concerning its energy policies and environmental protections, even as debates over clean energy's trade-offs persist in Brazil and beyond, from the infamous Brumadinho disaster to widespread allegations of illegal deforestation and gold mining.

“I can’t speak for the whole of Brazil, but if we look at Ceará specifically, and even from what we’ve seen from a federal government standpoint, they have been talking about a hydrogen roadmap for Brazil for quite some time now,” says Cooke, highlighting the state’s long-standing support for green hydrogen. “I think we came in at the perfect time with a very solid plan for what we wanted to do, [and] we’ve had nothing but great cooperation, and even further than just cooperation, excitement around the MOU.”

This narrative shift could help overcome one of the key challenges facing many hydrogen projects, the idea that its practical difficulties render it fundamentally unsuitable for baseload power generation. By establishing a large-scale green hydrogen facility in a country that has recently struggled to present itself as one that is invested in renewables, the Base One facility could be the ultimate proof that such clean hydrogen projects are viable.

Nevertheless, practical challenges remain, as is the case with any energy project of this scale. Cooke mentions a number of solutions to two of the obstacles facing hydrogen production around the world: renewable energy storage and transportation of the material.

“We were looking at compressed hydrogen via specialised tankers [and] we were looking at liquefied hydrogen, [as] you have to get liquefied hydrogen very cool to around -253°, and you can use 30% to 40% of your total energy that you started with just to get it down to that temperature,” Cooke explains.

“The other aspect is that if you’re transporting this internationally, you really have to think about the supply chain. If you land in a country like Indonesia, that’s wonderful, but how do you get it from Indonesia to the customers that need it? What is the supply chain? What does that look like? Does it exist today?”

The future of green hydrogen
These practical challenges present something of a chicken and egg problem for the future of green hydrogen: considerable up-front investment is required for functions such as storage and transport, but the difficulties of these functions can scare off investors and make such investments uncommon.

Yet with the world’s environmental situation increasingly dire, more dramatic, and indeed risky, moves are needed to alter its energy mix, and Enegix is one company taking responsibility and accepting these risks.

“We need to have the renewables to match the dirty fuel types,” Cooke says. “This [investment] will really come from the decisions that are being made right now by large-scale companies, multi-billion-euro-per-year revenue companies, committing to building out large scale factories in Europe and Asia, to support PEM [hydrolysis].”

This idea of large-scale green hydrogen is also highly ambitious, considering the current state of the energy source. The International Renewable Energy Agency reports that around 95% of hydrogen comes from fossil fuels, so hydrogen has a long ways to go to clean up its own carbon footprint before going on to displace fossil fuel-driven industries.

Yet this displacement is exactly what Enegix is targeting. Cooke notes that the ultimate goal of Enegix is not simply to increase hydrogen production for use in a single industry, such as clean vehicles. Instead, the idea is to develop green hydrogen infrastructure to the point where it can replace coal and oil as a source of baseload power, leapfrogging other renewables to form the bedrock of the world’s future energy mix.

“The problem with [renewable] baseload is that they’re intermittent; the wind’s not always blowing and the sun’s not always shining and batteries are still very expensive, although that is changing. When you put those projects together and look at the levelised cost of energy, this creates a chasm, really, for baseload.

“And for us, this is really where we believe that hydrogen needs to be thought of in more detail and this is what we’re really evangelising about at the moment.”

A more hydrogen-reliant energy mix could also bring social benefits, with Cooke suggesting that the same traits that make hydrogen unwieldy in countries with established energy infrastructures could make hydrogen more practically viable in other parts of the world.

“When you look at emerging markets and developing markets at the moment, the power infrastructure in some cases can be quite messy,” Cooke says. “You’ve got the potential for either paying for the power or extending your transmission grid, but rarely being able to do both of those.

“I think being able to do that last mile piece, utilising liquid organic hydrogen carrier as an energy vector that’s very cost-effective, very scalable, non-toxic, and non-flammable; [you can] get that power where you need it.

“We believe hydrogen has the potential to be very cost-effective at scale, supporting a vision of cheap, abundant electricity over time, but also very modular and usable in many different use cases.”

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