Brazilian state-run energy company Petrobras has commissioned the world’s first ethanol-fired power plant to increase use of the biofuel and boost clean power generation.

Engineering giant GE helped design and upgrade the 87MW plant to facilitate switching of fuels between natural gas and ethanol.

GE Latin America Products director John Ingham was quoted by Reuters as saying tests on switching the plant to ethanol showed a reduction in CO2 emissions without lowering energy output.

Brazil primarily relies on hydroelectric power but needs thermal backup during the dry season.

The country is expected to produce a record 27.8 billion litres of ethanol in the 2009-2010 season and presently mandates a minimum 20% of ethanol doping in gasoline.

Petrobras, which recently entered the ethanol market with GE, expects that increased use of ethanol-based power by countries will increase demand for the fuel.