Montevideo — The Uruguayan government presented its roadmap for its green hydrogen, or H2U, project this week, with which it seeks to develop the clean fuel and derivatives sector from private investment, and claims it can generate $2.1 billion in revenues from the sector by 2040 and position Uruguay as a worldwide exporter of the fuel.
The government added in its presentation of the plan that the development of the industry could generate up to 34,000 jobs in the country, among specialized technicians, operators and engineers and that, by 2040, green hydrogen production could approach one million tons per year, and which will require an installation of 20GW in renewable energy generation capacity, and 10GW in electrolyzers.
Uruguay projects estimated costs of between $1.20 and $1.40 per kilo of hydrogen in the western region of the country, and between $1.30 and $1.50 per kilo in the eastern region, with more than 500MW capacity.
The government meanwhile has pledged to “promote the corresponding regulations, permits, a set of attractive incentives, and carry out an analysis of the necessary infrastructure for the sector’s development and eventual promotion in the future”.
Industry Minister Omar Paganini said that both Germany and some Scandinavian countries have “a special interest” in the development of the sector in Uruguay.
A look at the numbers
Estimated exports and the supply of the domestic market could lead to annual revenues of $2.1 billion, according to the plan. That figure will be reached by export markets for synthetic fuels and hydrogen, as well as the use of the hydrogen for the decarbonization of the Uruguayan economy, while in the green fuels and derivatives sector, the government is also looking to develop jet fuel.
Uruguay would have an export opportunity of some $95 million by 2030 and $1.3 billion by 2040, according to the plan, while green jet fuel would represent 55% of that total by 2040, and hydrogen would contribute 25% to the fuel consumption of the maritime sector, using 15% ammonia or e-methanol, the plan states.
The domestic opportunity alone could reach a turnover of about $200 million in 2030, and US$750 million in 2040.
The three phases
The development planned by the government has three stages. To 2025, the program aims to promote the development of the domestic market and generate the bases for the first projects, and the government will seek to implement specific regulations for the sector.
The first stage has already received proposals for 10 projects that aspire to access part of a $10 million fund announced to develop pilot initiatives.
The second stage, which the government envisages carrying out between 2025 and 2030, will seek to develop infrastructure to scale up the domestic market and implement the first projects for export, while the third phase, between 2030 and 2040, will seek to consolidate the domestic market and scale up production and export of products such as green hydrogen and green ammonia.
Translated from the Spanish by Adam Critchley