Green hydrogen production in Uruguay: a techno-economic approach

In 2015, the participants of the Paris Agreement collectively acknowledged the urgent need for immediate actions to decarbonize their national economies, with the aim of mitigating the adverse impacts of climate change. There is a call for policymakers to step up efforts to significantly reduce greenhouse gas (GHG) emissions in all economic sectors, with a focus on prioritizing options that can deliver substantial emission cuts. Some industry and transport subsectors present significant challenges in terms of technical and economic feasibility. Viable solutions for these sectors, known as “hard-to-abate” sectors, are limited. Green hydrogen has emerged as a promising alternative that is gaining increasing attention. It is poised to play a crucial role in transitioning towards a more sustainable future. There is a growing interest in green hydrogen among researchers, institutions, and nations, all committed to advancing its development, improving efficiency, and reducing costs. This paper explores the concept of green hydrogen, particularly its production processes that rely on renewable energy sources in Uruguay. It demonstrates the significant potential for green hydrogen production, facilitating the transition from fossil fuels to clean energy and promoting environmental sustainability through the widely accepted electrolysis process. Uruguay currently boasts a high percentage of renewable electricity generation (reaching 97 % in 2020). To support this further, there is a need to increase renewable energy capacity, which would impact the energy prices. The cost of energy accounts for more than 40 % of the levelized cost of hydrogen (LCOH) in all studied scenarios. Additionally, optimizing the costs associated with electrolysers, which can exceed 30 % of the LCOH in polymer electrolyte membrane (PEM) electrolysis, is crucial. This optimization is essential for positioning the country as a net exporter of green hydrogen. The range of LCOH values calculated in the different scenarios is between 2.11 USD/kg H2 and 4.12 USD/kg H2. According to updated specialized literature, achieving LCOH values under USD 1.4/kg H2 is essential for this goal.