Chile's bet on green hydrogen

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Chile aims to be the world’s cheapest producer of green hydrogen and to rank among the top three exporters globally by 2040.
Green hydrogen: hydrogen produced by passing a current through water in an electrolyzer using energy from renewable sources; hydrogen is captured, stored, and transported for use in zero-emission fuel cells or combined with carbon dioxide to make synthetic ammonia or methanol.
Current global context: 95 percent of the world’s hydrogen is produced using energy from hydrocarbons (“gray” hydrogen). The International Renewable Energy Agency estimates hydrogen could account for as much as 12 percent of global energy use by 2050 and identifies Chile, Morocco, and Namibia as potential green hydrogen exporters.

Population: 19.5 million.
Renewable energy sources cited:
- Fierce solar radiation in the Atacama Desert.
- Strong winds in Patagonia (Magallanes region).
- Strong ocean currents, geothermal energy, hydroelectric power from central and southern rivers.
- Almost half of the world’s known lithium reserves sit under Chile’s salt flats.
National grid capacity and renewable share:
- Nearly 30,000 megawatt capacity of the national grid.
- In August this year, 58 percent of that capacity came from renewable sources.
- The proportion is projected to reach 62 percent next month with several projects coming online imminently.

National green hydrogen strategy presented in November 2020.
Strategic ambitions:
- Produce the world’s cheapest green hydrogen by the end of the current decade.
- Break into the top three green hydrogen exporters globally by 2040.
Government commitments:
- Carbon neutrality by 2050.
- Close or repurpose all 21 coal-fired power plants by 2040.

Government support and grants:
- In December, the Chilean government pledged $50 million in grants to six green hydrogen projects, including $17 million granted to the Faro del Sur project.
Project examples:
- Enel Green Power Chile:
- Haru Oni pilot project: aim to produce an annual yield of 350 tons of synthetic methanol and 130,000 liters of gasoline.
- Faro del Sur wind farm at Cabo Negro: planned area 38 square kilometers, $500 million cost, 65 turbines, projected to generate 325 megawatts of green hydrogen energy; recently withdrawn from Chile’s environmental evaluation system because of “exceptional demands” but expected to proceed after negotiations.
Investment projections by the energy ministry:
- Investment in green hydrogen and other derivatives could reach $45 billion by 2030.
- Investment could reach $330 billion by 2050.

Magallanes wind potential:
- Government estimate: 13 percent of the world’s green hydrogen could eventually be produced using wind energy from Magallanes and Chile’s Antarctic claim—amounting to 126 gigawatts.
- Local estimate (conservationist Diego Luna): that would require the installation of at least 13,000 square kilometers of wind turbines.

Potential environmental impacts cited:
- Wind turbines placed in the flight paths of up to 60 species of migratory birds.
- Increased maritime traffic could affect dolphin and whale populations.
Social and infrastructural concerns for Punta Arenas and Magallanes:
- Punta Arenas largely accessible by boat (barring a detour through Argentina); most supplies arrive by boat.
- Schools, hospitals, and other services could be stretched by workforce arrivals.
- Conservation perspective: risk of Magallanes becoming a “sacrificial zone”; potential for the region to become socially, culturally, physically, and economically unrecognizable.

Industry timeline expectations:
- Enel expects that within two to four years it will have a good handle on the feasibility of green hydrogen in Patagonia.
Current industrial scale:
- Chile does not yet produce any green hydrogen on an industrial scale.

Chile’s Bet on Green Hydrogen — JOHN BARTLETT, December 2022

Chile's Bet on Green Hydrogen
- Chile's Bet on Green Hydrogen (Markdown version)
- Chile's Bet on Green Hydrogen (PDF)