Renewable Energy: Bidders Flock to Chile's $50M Renewable Hydrogen Auction

ON 09/17/2021 AT 10:45 PM

The government of Chile received ten credible bids from a variety of well-respected international companies in its just-closed tender offer for companies willing to invest in clean hydrogen production in the country.

Hand Sculpture in Chile's Atacama Desert

A sculpture rises out of the Atacama desert in Chile, one of the locations being considered for new state-of-the-art hydrogen production plants to be financed in part by the government. Photo: Image by Herbert Bieser from Pixabay

The tender offer was for a $50 million national green hydrogen tender. It is the first ever offered by a nation anywhere and is intended to bring in the world’s best to set up operations to produce the zero-carbon-emissions fuel hydrogen.

The ultimate objective of the tender is to establish multiple facilities which can continue to produce the fuel at relatively low costs and in high quantity. It could transform Chile as the go-to country in Latin America as a provider of what of the most promising sources of clean energy for a carbon-free future.

For the company or companies which are finally selected as winners in the tender, the country’s national economic development agency, Corfo, will be providing up to $30 million in financing for the various projects.

To be qualified, each bidder had to submit plans for projects of at least 10 MW, were powered solely by renewable energy, and which would be in full operation by December 2025.

The renewable energy sources to power the plants would come from either solar or wind farms installed on the premises. With the country blessed with high winds in its southern provinces of Magallanes and Aysén and vast sun-drenched desert regions in the northern provinces of Atacama and Antofagasta, the country offers some of the highest efficiency – and therefore lowest cost – renewable energy options in the world to run the plants.

“We are in a global race to attract the first customers, and that is why this call is so relevant and positions Chilie as a vanguard country,” said Pablo Terrazas, Corfo executive vice-president.

“We have to consider that Chile, thanks to its advantages in the generation of renewable energies, with the highest solar radiation in the world and an excellent wind resource, is one of the countries that stands out for its potential to produce and export green hydrogen on a global level, which will reduce costs, as happened with the photovoltaic industry.”

Among the bidders for the various projects were local provider Chilean LNG terminal GNL Quintero, the Chilean power enterprise Imelsia Energia, offshore wind developer and green investor Copenhagen Infrastructure Partners (CIP), Italian energy giant Enel, French 24/7 energy developer French energy provider Hydrogène de France, Engie,gas production leaders Linde from Ireland, Air Liquide from France, and a project put together by Chilean investment firm Sociedad de Inversiones Albatros.

According to Corfo, the average project size bid in the auction was for a 20 MW facility.

With the bid tender period closed, Corfo will quickly review the bids and determine which of the various winners will receive funding and how much. Corfo will announce the tender awards within a few months, officials said.

The current largest green-hydrogen plant actively producing fuel is the 20 MW Bécancour plant in Quebec, Canada. It is operated by Air Liquide.