EDP said it is on track to start operating Brazil’s first green hydrogen plant as soon as next year, beating other major energy groups looking at renewable H2 production in South America’s largest economy.

The local arm of the Portuguese group will spend R$41.5m ($7.9m) installing 3MW of electrolyser capacity at the port of Pecém in the state of Ceará, taking power from Brazil’s huge installed base of wind and solar.

EDP Brasil CEO João Marques da Cruz said Ceará offers strategic characteristics necessary for the introduction of green hydrogen in the country because of “its exceptional solar and wind potential its strategic location [in Brazil’s westernmost point in the Atlantic Ocean] and because of the excellent port infrastructure” that allows shipping to international markets.

“This project will turn Ceará into a pioneer for the creation of know-how and place the state in the centre of a vast production chain and use of the fuel,” said Cruz.

The pilot project will be linked to research into the green H2 production chain and business models, technological insights and investigation of potential partnerships with the local automotive sector and other industries.

The Ceará state government earlier this year unveiled plans to develop a green hydrogen hub for export consisting of at least two large-scale production projects, one of which would be linked to an offshore wind farm.

EDP wants the plant to be operational by the end of 2022, putting it ahead of a clutch of projects looking to link green hydrogen production with renewables, including other major international players such as Iberdrola. Most of the other projects mooted for Brazil expect to begin hydrogen output in 2025 or later.

The planned developments aim to tap into Brazil’s high capacity factors that enable cheap renewable power from a 500GW-plus onshore and shallow offshore wind potential alone, not to mention its huge solar PV and biomass resources.

“There are several pathways for producing green hydrogen in Brazil because of our diversity of renewable sources. Brazil is well positioned, but [the success] will depend on the business model and the offtakers,” Recharge was told earlier this year by Giovani Machado, director at the government’s energy research authority (EPE), who authored a far-reaching report on renewable H2 policy published in February.

In early August Brazil’s National Energy Policy Council started appraising plans for new green H2 regulations, government tax incentives, exports; and sourcing of international agreements and financing.