Chile has launched a previously announced tender to help kickstart green hydrogen production as part of a national strategy to become carbon neutral by 2050.
The tender would award up to US$30mn in financing to one or more projects that would install more than 10MW of renewable generation capacity for hydrogen production before the end of 2025, according to development agency Corfo.
The total budget Corfo can allocate is US$50mn, to be disbursed starting in 2022, according to the tender documents. The financing is accessible to both local and international players.
The contest is part of a government strategy to turn Chile into a world class hydrogen producer and exporter by 2040. The first step includes installing initial capacity aimed at satisfying local demand, especially from the mining industry and refineries, by 2025.
According to Corfo, during a previous phase meant to test industry interest in developing hydrogen projects, the state agency received details of 18 projects for a total estimated investment of US$12bn in Chile’s northern Atacama and Antofagasta regions. A participant is not required to have taken part in previous consultation phases of the tender to apply.
There is a growing number of hydrogen projects being evaluated for development in Chile. The country is considered attractive due to the standout nature of its wind and solar resources, existing demand in the form of a developed mining industry and export potential to Asia via the Pacific Ocean.
Green hydrogen can help industries by cutting emissions, such as replacing diesel vehicles used in mining and machinery, and by developing cleaner fertilizers for agriculture.
Chile has potential for over 1,800GW of renewable capacity or 70 times the country’s current demand.
The government expects Chile will be able to produce some of the cheapest green hydrogens on earth over the next 30 years and could produce up to 160 megatons per year of fuel.