Finance
Wartsila bets flexibility key for ethanol power generation in Brazil
Published by Global Banking & Finance Review®
Posted on May 29, 2025
3 min readLast updated: January 23, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on May 29, 2025
3 min readLast updated: January 23, 2026
Wartsila is testing ethanol power generation in Brazil, aiming for a flexible energy solution despite past challenges with high costs.
By Oliver Griffin
SAO PAULO (Reuters) -Finland's Wartsila is betting that a more nimble way to generate power with ethanol will prove viable in Brazil where similar efforts by major firms floundered a decade ago.
Wartsila announced a partnership in March with a power plant in the northeast Brazilian city of Recife, where a four-megawatt engine will burn ethanol for 4,000 hours during a two-year pilot starting in April 2026.
The Finnish company billed its efforts as a world-first trial in generating electricity with an ethanol-powered engine. But similar experiments by Brazilian corporate heavyweights Petrobras and Vale sputtered out amid high costs and low uptake, according to people who worked on those projects.
Brazil is the world's second-largest producer of ethanol, after the United States, producing the biofuel largely from sugarcane and increasingly from corn. Brazil has used ethanol to power cars for decades, leading to volatile prices affected by sugar and petroleum markets.
In 2010, Petrobras teamed up with General Electric, before the U.S. manufacturer split into three separate public companies, to convert a gas turbine at the state-run oil producer's power plant in Juiz De Fora to run on ethanol.
"Ethanol was very sexy, everyone gets very hyped about it," a person with knowledge of the project told Reuters on condition of anonymity. The plant returned to running on natural gas shortly after the 1,000-hour test was completed, as higher costs made ethanol untenable as a fuel in the long run, the person added.
Petrobras confirmed the turbine in Juiz De Fora now runs on natural gas.
Vale Solucoes em Energia (VSE), a startup majority-owned by the mining giant, invested some $600 million in clean energy, including ethanol-powered electricity, VSE's former Chief Executive James Pessoa said in an interview.
VSE built smaller ethanol-based generators for electricity which were used in Rio de Janeiro and Amazonas state, Pessoa said, adding that another was built at Brazil's Antarctic research station.
VSE was shuttered by 2013. Pessoa said he had not seen any further development since then of ethanol-powered generators like those produced by VSE.
"The technology exists," he said, adding that Brazil could have millions of heavy ethanol engines powering the country. "But in practical terms, there are zero (in operation)."
Wartsila plans to test ethanol as a fuel for one of its 32M engines, which is larger than the VSE generators but far smaller than the plant converted by Petrobras, seeking efficiency at a more flexible scale.
While running a turbine on ethanol 24-7 is more costly than natural gas, those plants cannot provide the flexibility needed by a grid like Brazil's, which is mostly powered by renewables, Jorge Alcaide, Wartsila's managing director in Brazil and head of its energy business in the southern America region, said in an interview.
The engine will "follow the wind" and start up quickly when renewable sources like wind and solar fall off, said Alcaide.
Wartsila declined to reveal its spending on the pilot.
"Thermal power plants in Brazil should be used in the standby model," he said. "We need thermal to be available, it's like insurance."
(Reporting by Oliver Griffin; Editing by Brad Haynes and Richard Chang)
Wartsila is testing a more flexible method of generating power using ethanol in Brazil, partnering with a power plant in Recife for a two-year pilot project.
Previous efforts by major companies like Petrobras and Vale faced challenges, leading to a return to natural gas shortly after initial trials.
Wartsila plans to use a larger 32M engine designed for flexibility, which can quickly start up when renewable sources like wind and solar are unavailable.
The initiative aims to provide a more nimble and efficient power generation solution that can complement Brazil's renewable energy grid.
Brazil is the world's second-largest producer of ethanol, primarily from sugarcane, making it a key player in the biofuel industry.
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