Uruguay green hydrogen R&D call expected to draw strong foreign interest

A call for green hydrogen R&D projects in Uruguay with a production-oriented focus is expected to draw solid interest from international players.

The government recently launched a US$10mn fund and announced that bidding rules would be published in April. Funds would be delivered as a grant and disbursed over 10 years. 

Projects must involve electrolyzers of over 1.5MW in capacity and be in operation before 2025.

Officials are seeking green hydrogen and green hydrogen derivative production projects, citing products such as e-methanol, e-kerosene, green fertilizers and hydrogen-natural gas blends as examples.

Both local companies, as well as consortiums formed by local firms and units of foreign players, can participate. Proven experience in the installation and operation of electrolyzers of 1MW or bigger is required. 

“The call will be open to different possibilities regarding energy source and project scale and location,” a government presentation reads.

Fernando Schaich, founder of Uruguayan energy consulting firm SEG Ingeniería, told BNamericas it was likely most bidding parties would involve a foreign stakeholder. “Maybe there could be some specific exceptions to this,” he added.

Launched by the energy ministry, national research and innovation agency ANII and national technology laboratory Latu, the first phase of the fund is designed to help get production underway.  

Domestically, Uruguay is looking to use green hydrogen in areas such as transport to complement an electrification drive.

Uruguay is a hydrocarbons importer, but generates the bulk of its electricity from renewables, chiefly wind and hydropower. Cheap, plentiful electricity from clean sources is a key component of any green hydrogen push. 

Schaich considers the country to be well positioned. “We have plenty of water which could be used for this purpose, space for renewable generation, a very complementary wind/solar PV resource, long-term regulation with no surprises as the political colors change, and many other benefits,” he said.

Against this backdrop, authorities have previously said bidding processes would be launched for onshore and offshore green hydrogen production projects, designed to woo private investment. Uruguay is eyeing both the domestic and export markets. 

State hydrocarbons company Ancap recently signed a green hydrogen MOU with World Bank Group member IFC. The deal could provide a source of financing. 

Authorities are due to publish a long-term green hydrogen plan this month, with one focus being the use of green hydrogen as a substitute for diesel in industry and heavy transport.