The clean and renewable energiesIt is one of the main interests in the search for sustainable development for the coming years around the world, and Uruguay was one of the first countries in the region to see a window of opportunity there for attracting foreign direct investment (FDI)with the plant project green hydrogen in Paysandu as the largest private investment in the history of the country. However, important competitors at the regional level are also seeking to enter this field, how can it affect the country’s plans?
The news may not yet set off alarm bells, but it surely calls for attention: the president of Colombia, Gustavo Petro, negotiates with its Brazilian counterpart Luiz Inácio Lula da Silva an alliance between the oil companies Ecopetrol and Petrobras, with the aim of working together on a green hydrogen project and promoting the production of this clean energy to put the region at the “avant-garde.”
The alliance was proposed as “a strategic key” to strengthen the decarbonization of the economy—one of the objectives that also has Uruguay. “I propose to make a common project of green hydrogen in Colombia and in Brazil to become vanguards of clean energy in South America and in the world. It is likely that the green hydrogen be the oil of the future; The Germans say so,” Petro said in this regard.
For the agreement to be finalized, many levels of negotiation will surely be missing, but the rapprochement between Colombia and Brazil There is no doubt —Lula will help promote Colombian entry into the BRICS, after the resignation of Argentina-; much of the flow of investment between both countries it is already energetic; and clean energies and green hydrogen, They are a great development opportunity for the two South American nations, with the advantage that Brazil, where 90% of the energy is already supported by renewable sources, and has an important track record in the matter.
The implications of the new scenario for Uruguay
The entry of a direct competitor such as Brazil, Due to its resources and its size, it could be a hard blow for Uruguay, that could be relegated in the preferences of investors. Although, for the moment, this is not happening despite the fact that the country governed by Lula da Silva is also advancing in various projects and agreements regarding the green hydrogen; The possibility that national advances must be made subject to block negotiations with the regional power is a risk for attempts at greater autonomy.
At the moment, Brazil works side by side with European Union (EU) in terms of clean energy, and there is an investment planned for this year of 2 billion euros for the production of green hydrogen in the northern country. Only in Rio Grande do Sul Nine memorandums of intent to produce this fuel have already been signed, while in the state of Ceará, There are already more than 30 agreements between companies and the government.
Uruguay It only has a memorandum of understanding on energy cooperation with the European bloc. A logical question given the difference in size of the countries; but necessary to take into account precisely for that very reason: the opportunities it provides Brazil —where, even, the availability of water resources, essential for the production of green hydrogen, is much larger—are more attractive to investors.
The truth is Uruguay, Today, it has a greater use of renewable matrix in energy production: the northern country generates 85% of electricity through renewable sources, while, locally, in the last 12 months, 97.9% of electricity was generated with renewable energy. This is what, along with a favorable investment environment, caught the interest of HIF Global, who is working on a 6 billion dollar project; or of Alfanar Energy Spaina Saudi company based in Madrid which plans a disbursement similar to that of the Chilean company.
The effect that an association may have between Brazil and Colombia will remain to be seen but, for the moment, the country is firmly moving forward in its intention to be an exporter of green hydrogen, preparing to be a strong competitor in the region.
Source: Ambito
