Green hydrogen pilot projects getting off the ground in Chile

As the Chilean government pushes forward with an ambitious green hydrogen development strategy unveiled last month, several pilot projects to test the technology are starting to see the light.

The local subsidiaries of Italian oil and gas firm Eni and electric power player Enel are developing two hydrogen pilots, which would each require generation capacity of 10MW and are expected to start operations between 2022 and 2023.

Output from the projects would be used initially to feed Eni’s refineries, Enel Group CEO Francesco Starace said in a release.

Meanwhile, the local arm of German engineering firm Siemens secured an 8.23mn-euro financing deal from the German ministry of energy and economic affairs to move forward with the Haru Oni green fuel project in Chile.

The project involves using wind power to produce hydrogen and derivatives such methanol and a carbon-neutral synthetic fuel. In total, it will require investments of US$38mn, according to the documents submitted to environmental evaluation agency SEA. It is being developed in partnership with Enap, Enel Green Power, Porsche and AME. 

Chile aims to become a world-class hydrogen production hub by 2040 by leveraging the low cost of domestic clean energy, with vehicle emissions potentially radically reduced through widespread adoption of the fuel.

The government expects Chile to be able to produce some of the cheapest green hydrogen on the planet over the next 30 years, starting from production costs of between US$1.7/kg and US$2.6/kg depending on the technology and region by 2025 and possibly falling as low as US$0.8/kg by 2050. The government has said Chile could produce up to 160 megatons per year of green hydrogen.

To encourage rapid development of the sector, the government has set aside US$50mn to conduct a financing round for pilot projects that will be accessible to both international and domestic players. It is also considering establishing a carbon tax, which would boost green hydrogen’s local competitiveness.