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Chile's hydrogen vision: evaluating plans amid ambitious roadmap targets

Chile’s ambitions in the green hydrogen sector are reflected in its recently released hydrogen action plan 2023-2030. Through targets outlined in the National Green Hydrogen Strategy, Chile is aiming to make significant strides in its hydrogen roadmap. However, the current status and progress of green hydrogen development indicate a gap between goals and reality. The plan’s targets of 5 gigawatts (GW) of electrolysis capacity by 2025 and 25 GW by 2030 are ambitious but are likely to face challenges in implementation. This disparity raises questions about the feasibility of the roadmap targets and underscores the need for an accelerated project development pace.

Chile currently has less than 900 megawatts (MW) of green hydrogen capacity due online by 2026. Although there are plans for about 15 GW of electrolysis capacity by 2030, around 75% of this is still in the concept phase. Accelerating project development is vital to realizing this potential, as delays in renewable power installations and securing project financing could slow down progress.

The project pipeline in Chile is driven by Verano Energy and Siemens’ Los Amigos del Verano project. Located in Taltal, the project features three phases of 2.5 GW electrolyzer capacity and a fourth phase consisting of four 2.5 GW hydrogen generation plants, accounting for 17.5 GW of total electrolyzer capacity. The plant will produce ammonia, which will be transported to the coast to a marine storage and distribution facility via a 100-kilometer (km) pipeline. In the Magallanes region, a 12 GW ammonia for export project from CWP Global and an 8 GW ammonia plant by TEH2 is also planned. These plants are in the preliminary stages of development and will need financial and policy support.

Chile also plans to decarbonize the mining industry and has recently launched a green hydrogen project to help do so. H2 Green Mining (Susterra) and Ohmium will develop the 200 MW green hydrogen project in Northern Chile, featuring three phases of 20 MW, 80 MW and 100 MW. The green hydrogen produced will be distributed to the Calama mining district and will substitute the consumption of fossil fuels in smelting, refining, transport, and thermal processes.

Chile’s green hydrogen action plan, released in April 2024, builds upon its national hydrogen roadmap. It outlines the steps to be taken from 2023 to 2030 with the goal of transforming the national economy, substituting polluting industries with sustainable alternatives, and achieving carbon neutrality by 2050.

Chile is targeting the production of green hydrogen for $1.5 per kilogram (kg) by 2030 and estimates a significant export market for green ammonia and green hydrogen as a result. It aims to export $3 billion worth of green hydrogen and its derivatives by 2030. Of this, $2 billion is expected to be from green ammonia and another $500 million from green hydrogen. The target is expected to grow at a 15% compound annual growth rate (CAGR) to reach $24 billion by 2050.

Green hydrogen exports are projected to dominate, generating $19 billion, while ammonia exports are estimated to reach $5 billion. The targets are based on two key assumptions: that hydrogen will become as cheap as $1.5 per kg by 2030 and that the country will have sufficient production capacity to cater to the export market. Currently, these assumptions appear to be overly optimistic, and the trajectory suggests that these goals are far from being realized.


Authors: 

Dishant Bhor

Analyst, Clean Tech Research
disant.bhor@rystadenergy.com

Minh Khoi Le

Vice President, Clean Tech Research
minh.khoi.le@rystadenergy.com


(The data and/or forecasts in this column are Rystad Energy's, and the opinions are of the authors.)