Southern Chile could turn into green hydrogen hub

Chile’s southernmost Magallanes region is being studied as part of the country’s push to become a world-class green hydrogen production hub due to its standout wind power potential.

According to Chile’s energy ministry, a study estimated the region could produce 10Mt/y of green hydrogen through wind power turbines.

So far, Chile’s green hydrogen push has focused on the country’s northern regions, which not only have world-class photovoltaic potential, but solid wind potential and demand for hydrogen from a large-scale mining industry.

However, the energy ministry found Magallanes had the potential to add some 126GW of wind capacity, and could make use of existing infrastructure to expand export activity. This includes well-located ports and petrochemical experience involving a methanol production and export business.

So far, the region is only host to two wind generators totaling 12.9MW. Traditionally, it has not been attractive for generation investments due to limited power demand and isolation from Chile’s national grid. But a burgeoning green hydrogen industry could render these limitations irrelevant.

The ministry said Tierra del Fuego has especially high potential. The area is estimated to contain 41% of the region’s wind potential and wind turbines there are expected to have a utilization factor of 50%, higher than the national average for wind, which is close to 40%.

The ministry is also conducting a study to measure the potential of Antofagasta region, which currently concentrates most of the investment in new renewable capacity. 

Chile’s green hydrogen push is expected to cover between 17% and 27% of the country’s emission reduction commitments under the Paris climate accord and has generated a wave of interest in the fuel across Latin America.

The government has conducted roadshows to attract foreign investment for pilot projects and said earlier this month there are already 40 projects in the early stages of development.

Chile has earmarked US$50mn in subsidies for small-scale projects to test the technology as part of its green hydrogen strategy.