Foreign investment has been key to developing green hydrogen in Chile. Initiatives promoted by Enel Green Power, Linde, ENGIE, Air Liquide, GNL Quintero and CAP have been chosen for co-financing support by Chile’s Economic Development Agency, CORFO, with the goal of speeding up the development of the industry in our country.
CORFO has chosen six of the twelve proposals presented in the first call for applications to develop green hydrogen production plants in Chile. The goal is to speed up the development of these initiatives, which will be set up in the country’s northern, central and southern zones. They will allow Chile to respond to the challenges of climate change, as well as to promote investment in clean energy, job creation and business startup opportunities at the local level.
Chile ranks among the best countries around the world in terms of its potential to produce and export green hydrogen because of the significant advantage in renewable energy generation offered by it having outstanding wind resources and the world’s greatest solar radiation. “The projects that we’re supporting today, which have an electrolysis capacity of 388 MW, are equivalent in size to all those that are currently in operation around the world. With this, a pathway is being drawn out that will facilitate the development of future initiatives to install new capacities throughout Latin America in order to reach carbon neutrality. This places Chile at the forefront in the region,” explained CORFO’s Executive Vice-President, Pablo Terrazas.
He added, “it’s very positive that the projects we received include applications for explosives and transport in the mining industry, industrial processes in the iron and steel industry, residential heating, industrial heating and green fuels. Furthermore, we want to point out that all the proposals take into account desalination or improved efficiency in water use. They are also in line with the National Green Hydrogen Strategy, as the first stages consider its use in different applications throughout the country, which can then be expanded for exportation.”
Which green hydrogen projects were chosen by CORFO?
Proyecto Faro del Sur (Southern Lighthouse Project)
Presented by Enel Green Power Chile S.A., this project will produce 25,000 tons of green hydrogen per year in the Magallanes Region, thanks to the installation of 240 MW of electrolyzers and an electricity supply provided by a wind farm in the region. The green hydrogen will be sold to HIF Chile, who will then produce ethanol and e-gasoline for exportation to Europe.
The proposal presented by Linde GmbH involves installing a project to replace part of the gray hydrogen currently produced in the Aconcagua oil refinery located in the Valparaíso Region, which belongs to the state-owned petroleum company Empresa Nacional de Petróleos (ENAP). The project considers a potential 20 MW and anticipates generating 3,000 tons of green hydrogen per year.
HyEx – Producción Hidrógeno Verde (Green Hydrogen Production)
Led by ENGIE S.A., the project aims to build an industrial-scale pilot plant to generate 3,200 tons of green hydrogen per year, through a 26 MW electrolysis capacity in the Antofagasta Region. The green hydrogen will then be supplied to Enaex for green ammonia production, in order to reduce CO2 emissions by more than 30,000 tons per year.
Antofagasta Mining Energy Renewable (AMER)
The Air Liquide S.A. initiative entails the production of 60,000 tons of ethanol per year using renewable energy, green hydrogen and CO2 captured from a fixed source. It will have an 80 MW electrolyzer potential and will be set up in the Antofagasta Region.
Hidrógeno Verde Bahía Quintero (Bahía Quintero Green Hydrogen)
Led by GNL Quintero S.A., this project includes the development, construction and operation of the first large-scale green hydrogen plant. It will be located in central Chile’s Valparaíso Region. The project will have a 10 MW installed electrolyzation capacity, with which 430 tons of green hydrogen will be produced per year.
The CAP S.A. proposal involves setting up a green hydrogen plant in the Biobío Region. The plant will have 20 MW of electrolyzer power, which will produce 1,550 tons of green hydrogen per year and reduce CO2 emissions by more than 161,000 tons.
US$1 billion investment in Chile
“The chosen proposals will attract US$1 billion in investment and aim to produce more than 45,000 tons of green hydrogen per year, which will reduce annual CO2 emissions by more than 600,000 tons. This means we’ve achieved the goal of this call for applications, which is to kick off the development of Chile’s green hydrogen industry. This will be key to moving towards carbon neutrality by 2050 and fulfilling the goal that we as the Government have drawn out, to be leaders in producing this fuel in our country for the rest of the world,” Mr. Terrazas indicated.
As the first to be developed throughout the world, these initiatives will need to address various challenges, which will have to be resolved through innovation, R+D and productive technological development. This will make it possible to attract and generate knowledge and advanced human capital at the national level.
The chosen initiatives must begin operating by December 2025 at the latest. The projects will receive total development contributions of US$50 million, as soon as they install the promised electrolyzer capacity and meet the established terms and conditions. According to the characteristics and evaluation of each project, the amounts to be awarded are: “Proyecto Faro del Sur”, US$16,896,848; “HyPro Aconcagua”, US$2,424,629; “HyEx – Producción Hidrógeno Verde”, US$9,533,668; “AMER”, US$11,786,582; “Hidrógeno Verde Bahía Quintero”, US$5,727,099; and “H2V CAP”, US$3,631,174.
To find out more about Chile’s energy potential and investment opportunities in the renewables sector, check out the following article.