Chile launches green hydrogen pilot plant in Magallanes, amid ramp-up rumblings

Officials cut the ribbon on pioneering e-fuels plant Haru Oni in Chile’s far south Magallanes region, as project designer Siemens Energy and plant co-owner HIF Global tell BNamericas they are working on multiple other projects in the wind resource-rich part of the country. 

The launch on Tuesday, attended by ministers, local and foreign dignitaries and private sector stakeholders, was hailed as a historic moment in the fight against climate change and the development of Chile’s fledgling green hydrogen industry. 

Built in partnership with firms including state hydrocarbons company Enap, oil giant ExxonMobil and carmaker – and offtaker – Porsche, the plant reflects some US$100mn in outlay, comprising subsidies from the Chilean and German governments and private investment. 

Co-owned by a Chilean unit of Enel, the power generation and production complex in Punta Arenas is the first of its kind in the world and will initially produce 130,000l/y of e-gasoline, a production rate expected to climb to 550Ml/y by 2027. 

André Clark, senior VP for Siemens Energy’s Latin America hub, told BNamericas the project constituted a successful conversion of an R&D department concept into a working prototype and demonstrated the importance of project development ecosystems.

“The significance of this launch is that it shows that it’s possible, that it can be done,” Clark said.    

Porsche will be the initial offtaker of the fuel, which can be used in petrol engines without the need for modification.

Using a 1.2MW Siemens Energy electrolyzer, technology under license from ExxonMobil and clean power from a 3.5MW wind turbine, Haru Oni engineers are manufacturing e-gasoline from e-methanol, produced, in turn, from green hydrogen and carbon dioxide captured from the atmosphere.

Siemens Energy is engaged in similar energy transition ventures in the region, chiefly Brazil and Chile on account of their “tremendous, high-quality” wind power resources, Clark said.

In Chile, the company is collaborating with other firms on projects, mainly in Magallanes region. 

“Just in Chile, we’re seeing 8-9 of gigawatt-scale green hydrogen projects being studied,” Clark said, adding they were at the feasibility and prefeasibility stages. “We’re involved in terms of both the hydrogen and the wind power generation because we’re present across the value chain. Clients come to us to do these studies: how much they cost, what is the feasibility, what is the capacity factor, for example. We’re helping clients in this respect.” 

Chile is home to around 36 green hydrogen projects, among the largest planned for Magallanes, which, with its abundant land and rich energy resources, is poised to become a green energy hub. Challenges rest in areas including territorial planning, skills training and permitting. 

Environmental evaluation service SEA – already processing more projects than it was originally designed for – is being reviewed under government productivity and investment promotion initiatives. 

WHAT NEXT?

Multibillion-dollar export-scale projects have already been announced: H2 Magallanes, Faro del Sur, HNH Energy and Gente Grande.

Chile has a goal of having 25GW of electrolyzer capacity installed by 2030 and at least 3GW in construction in 2025. 

HARU ONI EXPANSION

César Norton, CEO of HIF Global, cited the importance of the Haru Oni launch.

“This is a major milestone,” Norton said. “We’ve proven you can produce synthetic fuels, carbon neutral, using wind, we’ve made it a reality.” 

HIF is planning a major ramp-up of Haru Oni as part of global expansion plans. In Chile, officials are working on a revised environmental impact statement for Magallanes green hydrogen project-linked wind farm Faro del Sur, which was pulled from the environmental permitting system early this year after allegations of a sudden change in requirements. 

“Regarding Faro del Sur, we’re working with authorities, with the local and national governments, to submit the project as soon as possible – and with certainty,” Norton said.

Southern Chile is fixed squarely in the company’s crosshairs.

“Our plan is to produce at least six global-scale plants here in Magallanes by 2032,” said Norton. Output would be enough to fuel 5mn cars.

While electrification of transport is a key decarbonization strategy, roughly 1.3bn internal combustion engine cars are on the road today globally, a sum expected to remain steady for at least another decade. Producing e-fuels to substitute fossil fuels is seen as a key part of the solution. 

REGIONAL DEVELOPMENT    

Roughly the size of Greece, Magallanes is Chile’s largest region.

National and local government officials said green hydrogen constituted a major sustainable development opportunity for the jurisdiction. 

Opportunities could emerge in areas including infrastructure, turbine-blade manufacturing, and downstream, such as green fertilizers.  

Chilean energy minister Diego Pardow, pictured filling a vehicle with e-fuel, said during the event the project was a "beacon of optimism." He added: "We have to take the value chain and create concrete opportunities for locals."