Chile and United States

A win-win solution for Chile’s power grid and sustainable fuels producers?

Bnamericas Published: Monday, November 21, 2022
A win-win solution for Chile’s power grid and sustainable fuels producers?

Instead of being dumped during hours when supply outstrips demand and the power grid is strained, electricity from renewables plants in Chile’s energy resource-rich north could be used at certain times of the day in the production of green ammonia, BNamericas was told.

Chile – like other countries with growing renewable energy parks – faces the challenge of efficiently managing daily spikes in clean power output and tackling decoupling issues.

Building out transmission infrastructure is a central pillar of the overall solution in the shard of a nation as it gradually retires its fleet of coal-fired power stations, but space, and in certain cases necessity, exists for balancing solutions as well as local offtakers that can purchase power during periods when there is plenty to spare.

Among them are producers of green hydrogen and derivatives such as green ammonia, made by combining the former ingredient with nitrogen. Potential use cases include as an engine fuel and as a feedstock for fertilizer producers.  

“Our business model, and our policy, is to produce green product on an intermittent basis so that our use and demand of renewable power is synergistic with the production of renewable power,” said Joel Moser, CEO of US-headquartered energy transition project developer First Ammonia. 

“Others can use it directly as electricity – that’s its highest and best use. When there is insufficient demand for the renewable power generation, the troughs, we will be the offtaker.”

An industry trailblazer, the company is developing in Germany what will likely be the world’s first modular, commercial-scale plant to produce green ammonia from intermittent renewable energy. 

This maiden unit – expected to be followed by more across the globe – is scheduled to become fully operational in 1Q25 as part of an eventual 5GW fleet. 

First Ammonia, whose affiliate First Ammonia Motors is working in parallel to develop the first combustion engine to run on 100% ammonia, has Latin America in its crosshairs, said Moser, who is also a professor at Columbia University in New York, where he lectures in international infrastructure. 

In Latin America, Chile’s green hydrogen and derivates industry is the most advanced but still remains in the nascent phase. It should gather steam over the next several years, starting with the commissioning of megawatt-scale plants targeting domestic offtake followed by gigawatt-scale export complexes from around mid-decade onwards.

In parallel, Chile’s renewables park is expanding. A key driver is a private sector initiative to retire some 5GW of coal-fired capacity by 2040, expected to require some US$30bn in outlay on 15GW of replacement clean generation and storage capacity and transmission infrastructure. 

To find out more about First Ammonia and its views on opportunities in Latin America, read the full interview with Moser this Friday.


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