Engie ushering green H2 into Chile’s mining patch

French utility Engie is spearheading two green hydrogen projects in Chile where abundant solar and wind energy underpin a government strategy for the emerging resource.

The copper mining industry in northern Chile forms the backdrop for Engie's green hydrogen plans. In the first phase of a partnership with local mining explosives manufacturer Enaex, the company has started a feasibility study to produce green ammonia in a project dubbed HyEx. An 18,000 t/yr pilot project, which is targeted for a final investment decision at end-2022, would use 36MW of PV solar energy for a 26MW electrolyzer. The "green hydrogen" would be used to make ammonia for Enaex's production of ammonium nitrate at its Mejillones industrial site on the northern coast.

The pilot project represents just 5pc of Enaex's 350,000 t/yr of ammonia consumption, which is currently imported. The challenge, even at the pilot stage, is economics, said Asuncion Borras, senior vice president for business development in Engie's hydrogen business unit.

"We need subsidies, because the competitive gap is large," Borras told Argus , noting that the current price for natural gas, the alternative feedstock for ammonia, is at historic lows. The green ammonia price, without support, is about three times the current conventional ammonia level, she said.

The HyEx team is casting a wide net for subsidies to support the feasibility study all the way through to capital and operating expenditures, including the electricity cost. In Chile, HyEx is looking to compete in a tender for $50mn in green hydrogen funding from state development agency Corfo. It is also eyeing future subsidy programs from the EU, Germany, France and Japan.

If successful, HyEx would develop a 700,000 t/yr green ammonia project in the 2027-30 window, with half of the volume earmarked for exports.

"It is a beautiful project, a feasible project. The challenge is to work on all of this in parallel to get it off the ground," Borras said. "This is new territory."

More broadly, she sees the international market moving toward a transitional mix including blue hydrogen — produced with gas and applying carbon capture — before evolving toward green hydrogen longer term.

Monster trucks In a new alliance with Brisbane-based global mining research group Mining3, Engie is working to bring carbon neutrality to Chile's mining industry with a Corfo-supported project to replace conventional diesel in giant mining trucks. The potential of its Hydra project is huge: each of Chile's roughly 1,500 mining trucks consumes 3,000 liters a day of diesel — equivalent to 3,000 t/yr of CO2. The total diesel consumption of the trucks alone exceeds 28,000 b/d.

Hydra recently kicked off phase two that will develop a protoype of a hydrogen-fueled mining truck and associated hydrogen supply chain. The more ambitious third phase would convert mining trucks to test the concept, followed by a fourth, industrial-scale phase. "This is a long but necessary road to decarbonize the industry," said Engie hydrogen solutions developer Consuelo Glaria.

The Hydra project is part of an international campaign by the mining industry to slash greenhouse gas emissions. In South Africa, Anglo-American and Engie are working on a similar project that is already at phase three, because it is taking place closer to sea level compared with northern Chile's high altitudes where there is less oxygen, Glaria said.

Other projects are targeted for the mining industries of Brazil and Peru.

Land access Engie is currently monitoring Chile's work on hydrogen regulations , which started at the end of September shortly before the government announced a national green hydrogen strategy. The regulations will cover installations for hydrogen production, treatment, storage, ground transport and consumption.

Engie sees expeditious access to government land as a top priority. "We need direct access to land, rather than going through tenders that add to the costs and uncertainty of the projects," Borras said, noting that a typical government land tender, conducted through the national assets ministry, can take at least nine months.

By Patricia Garip

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