Going green: Latin America's role in the future of hydrogen

As green hydrogen development attracts investor interest in Latin America and around the world, developers are looking for the best ways to take advantage of the opportunity.

As countries in Latin America publish their roadmaps and strategies for green hydrogen, a number of pilot projects have emerged with an eye on larger-scale initiatives.

As an engineering and technology company, Spain's Sener provides services to many of the companies involved. Latin America is still some way from implementing its first large-scale green hydrogen project, but many players are in the initial stages such as design and engineering work.

BNamericas spoke with Nora Castañeda, Sener Energy's hydrogen business manager, about regional development prospects, where the industry stands with regards to green hydrogen projects in Latin America, and how the region is faring compared to other latitudes.

BNamericas: What is Sener's experience with developing green hydrogen projects in Latin America?

Castañeda: We are an engineering and technology company, and what we’re doing in the area of green hydrogen is accompanying clients who are in the initial phases of the projects. In general, they’re doing feasibility studies, technology analysis, conceptual engineering to define what are the best project configurations or the best solutions. It’s a market that’s being created, and there’s an initial phase of analysis of alternatives where future projects are defined. There is another series of clients who already have their ideas more structured and where we start with the basic definition and even detailed engineering of the projects.

Right now, there are very few green hydrogen projects up and running. We’re carrying out a project in Spain for Repsol, but there are many that are being prepared to be launched as soon as possible. In Latin America, we’re working mainly in Chile and Brazil, and we’re also seeing very interesting opportunities in Argentina, Uruguay and Paraguay. These are places with very interesting renewable resources where large projects are being considered, for the large-scale generation of hydrogen with the intention of exporting it to places where it’s expected that there will be large consumption in the future. These are projects that require a long development process, with engineering work, technological knowledge, and that take time to come to light.

BNamericas: Some of the few projects that are in more advanced stages in the region are known as pilot projects. When will we see the construction of large-scale projects?

Castañeda: There are two parallel lines that are advancing. The projects that are going to be carried out first are small projects, from 20MW to 50MW of electrolyzers, and even less. These are projects that seek to demonstrate the technology, its feasibility and test first uses. Those are the ones that are closest to being developed. The other line of work, which is the most frequently mentioned in the press, are projects of the order of 500MW upwards, up to about 2.5GW, which are in a very preliminary phase, in a phase where they’re conceiving how a project would be carried out with those characteristics. In order to carry out a project of this type, the renewable generation associated with these electrolyzers is needed, which in most cases will be built specially for the generation of hydrogen, with all that this entails at the level of procedures and permits. On the other hand, there is the hydrogen generation plant. The fundamental unit of this plant is a stack that today has a size of 5MW, of which around 100 would have to be put online, depending on the size of the project. And 5MW electrolysis equipment weighs more than 50 tons. So we’re talking about projects with a lot of work to do to design the technical solutions that integrate these teams. So, there is a line of projects for the short and medium term, and another for the medium to long term, and both run in parallel. The objective is to be in a position to supply hydrogen to those future opportunities that are being demanded in Europe around 2026-30, when several countries are preparing to import many tons of hydrogen.

BNamericas: Getting large-scale projects off the ground surely comes with big logistical challenges. Is progress also being made in this area in parallel, like ports, supply chains, etc?

Castañeda: To advance in this entire market, work is being done on renewable generation, on the electrolyzer plants, but also on all the additional infrastructure that’s needed. We’re seeing design work for ammonia terminals, both in Chile and in Brazil. They are in the preliminary phases: doing the engineering, securing land, seeing how the infrastructure will be. It’s not yet being built and there’s still work to be done. 

To succeed in the hydrogen market, you also need port infrastructure, if you want to export. In Chile, the best places for hydrogen generation are in remote places, either to the south or to the north, where there is no consumption, so it’s necessary to take the product to another place. For large volumes, the most reasonable way to transport it will be to transform it into ammonia or some carrier, which is being worked on technologically, and export it to Europe or Asia or even move it within Latin America, since the industrial zones are at long distances. Whether we will have hydrogen pipeline infrastructure available in some countries remains to be seen. Perhaps, due to the distances, it will not make sense. It’s necessary to see what will be the most suitable locations for the generation of hydrogen.

BNamericas: Mexico is a country with enormous potential that is often overlooked when people talk about green hydrogen. How do you see the future of this market?  

Castañeda: We know Mexico well, and it’s true that due to the current political situation it’s difficult to consider developing renewable projects because the public sector is pushing hard. However, great potential is seen both due to the renewable resources present and the proximity to the United States. Mexico continues to be a very powerful industrial focus for supplying the American market. And we understand that the decarbonization requirements of its companies will increase in the coming years. In this sense, the industrialists who are there and who will need to decarbonize, have green generation consumption, are already preparing to make this change. Projects are being developed, preparing the way for when it’s feasible to carry them out and have their own renewable generation, their own hydrogen generation in situ. At that time, many will be ready.

BNamericas: How is development in Latin America comparing to other regions of the world, such as Europe, where Sener is present?

Castañeda: At the level of small projects, Europe is going to go ahead and have local generation of hydrogen for specific consumption, including for petrochemicals, fertilizers, consumers that can easily be converted to green hydrogen. But from then on, to obtain large volumes of hydrogen at reasonable prices, development in Europe will be quite in step with development in Latin America or other areas, such as the Middle East. The most competitive prices, given the renewable resources available in those areas, will drive development for export, although fewer pilots have been made in Latin America. This is consistent with what we see, since there are fewer pilot projects [than in Europe], and the development of projects is already geared towards large-scale exports.

BNamericas: In closing, what, in your opinion, is a key point to work on to realize the potential of the green hydrogen industry?

Castañeda: We’re very optimistic that a hydrogen market will gradually develop, but we’re very aware that this requires a very powerful technological development effort and work with existing solutions. They exist, but they have to evolve to be able to serve these uses and these sizes of projects. It’s not just a matter of integrating technologies, but of evolving them and working on them. We’re making a significant effort there, we’ve launched three research and development projects, and I believe that promoting this innovation is going to be a fundamental part so that interesting solutions can be reached for the projects that are being outlined and that are being thought of.