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Chile's government announced new tenders for green hydrogen
projects of 10 MW or larger that could be operating by the end of
2025.
In all, $50 million is available to support projects by either
domestic or international companies, according to the announcement
on 20 April from the Chilean National Development Agency, known as
Corfo.
"Our strategy contemplates the development of the fuel in
different stages. First, we seek to produce for and clean our local
industries, and once the industry is consolidated and sufficiently
scaled, we will be able to export hydrogen," Minister of Energy and
Mining Juan Carlos Jobet said in a statement.
Have 5 GW of electrolysis capacity under development by
2025
Produce the cheapest green hydrogen in the world by 2030
Be among the world's three largest hydrogen exporters by
2040
Supporting the program are research loans, 35% tax breaks on
R&D expenditures, loan guarantees, and other incentives.
"These and other initiatives could make Chile a powerhouse of
the hydrogen economy," said IHS Markit in a January
analysis of the program.
Green hydrogen - hydrogen produced through electrolysis that is
powered by renewables - can be produced in Chile from either solar
or wind power, both of which have huge potential in the country,
said IHS Markit.
"Unparalleled solar and wind resources and business-friendly
power regulations facilitate renewable electricity generation at
some of the lowest costs globally," IHS Markit said of the Chilean
market. "The country's power market is oversupplied, and its
renewables target for 2025 [of 20% of power] is already met, so
renewable producers are open to hydrogen business
opportunities."
Government estimates are that the country has nearly 1,700 GW of
solar power potential and nearly 200 GW of onshore wind power
potential. This is approximately 70 times the country's current
energy needs, according to Corfo.
The national hydrogen strategy is off to a good start, said
Jobet. "In November, we had 20 projects to develop green hydrogen,
and we have already more than doubled that number to more than 40
projects to produce or consume green hydrogen in Chile," he
said.
On the larger end of the scale of proposals is a partnership
between two Austrian companies, AustriaEnergy and Ökowind EE, for a
$3-billion green ammonia and hydrogen facility; it would be in the
southern part of the country where wind power potential is
abundant, the Magallanes Region. The partners would install 2 GW of
wind capacity to run a 1.4 GW electrolyzer to produce green
fuels.
A project announced last year as a partnership between Enaex, a
Chilean mine services company, and international energy company
Engie would construct a 2 GW solar farm in northern Chile, in order
to produce green hydrogen from a 1.6 GW electrolyzer facility, with
a possible startup of 2030.
In all, the proposed projects could require more than $12
billion of funding, according to Jobet.
But IHS Markit said that questions remain about how much private
investment in Chile will materialize. "The global economic crisis
and a debate over new constitution threaten Chile's ability to
attract foreign investment. Investor uncertainty will be elevated
during the next two years, until a constitutional referendum is
finalized," IHS Markit said.
Strikes are also indicative of the challenges facing the
economy. Some copper workers - Chile is the world's top copper
producer, and global prices are now at their highest level in a
decade - are currently on strike after being denied a pension
withdrawal, and a general strike has been called for 30 April.
