New energies
August 27, 2021 - 2 min

Green hydrogen projects take off in Chile

It's a good start, but there's still a long way to go

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Mining company Anglo American started up a pilot plant for the production of green hydrogen produced with solar energy, which supplies a forklift at the Las Tórtolas concentrator, north of Santiago. Anglo American's pilot plant is the fourth pilot project focused on green hydrogen in Chile, responding to a growing global interest in producing this type of fuel, obtained by electrolysis of water using renewable energy. This initiative joins the synthetic fuels project being built in the Magallanes region, involving energy company AME and state-owned Enap, as well as other partners; Engie and Enaex's project for the production of green ammonia for the manufacture of explosives for mining; and a US$30 million project announced by GNL Quintero together with Enagas and Acciona Energía.

The potential of green hydrogen, however, still faces several challenges. In addition to the design of a market for this technology and the regulatory and governance adaptation of the industry, the most important one is to achieve significant reductions in its production costs. In 2018, producing a kilogram of green hydrogen cost between US$5 and US$6 per kilogram according to the International Energy Agency (IEA). The magic number being bandied about in the industry to make it profitable is US$2/kg of hydrogen. This is where Chile has an advantage, with very competitive solar photovoltaic generation costs and great wind potential in the south of the country.