Uruguay  Business opportunity

Green Hydrogen from offshore wind farms

The Uruguayan Government has just announced that it would offer maritime areas for the installation of offshore wind farms aimed at the production and export of green hydrogen and its derivatives. The State-owned oil company (so-called “ANCAP”) plans to issue an international call for interested companies. This would be the first open round in the world for the production of green hydrogen in offshore areas.

Through this process, four (4) dates will be set for companies to submit their bids for four (4) different maritime areas.

An Executive Branch decree issued a few days ago, authorized ANCAP to enter into contracts with third parties in order to conduct feasibility studies for the evaluation and potential production of green hydrogen and/or derivatives from renewable energy.

Such areas would be located approximately 42 kilometers from the coast and will have an average surface area of approximately 270 square miles, with an energy production potential of 3 GW and a green hydrogen production potential of 200,000 tons per year.

The format proposed for the above contracts would contemplate evaluation periods which would range between two (2) and ten (10) years.

Uruguay: Pioneering a Green Energy Future

Uruguay has solidified its position as a global leader in renewable energy, with more than 90% of its electricity matrix powered by renewables between 2016 and 2022. Now, the country faces a new challenge: decarbonizing its transportation and industrial sectors, which still rely on fossil fuels. In this context, green hydrogen emerges as a key solution in the transition towards a fully sustainable energy matrix.

a) Why Invest in Green Hydrogen in Uruguay?

Proven Expertise and Leadership: Uruguay successfully completed its first energy transition, with 98% of its electricity demand met by renewable sources. Now, with a focus on green hydrogen, the country is advancing towards full decarbonization.

Unmatched Natural Resources: Uruguay's abundant solar and wind resources enable the competitive production of green hydrogen, with projected costs of USD 1.2–1.4 per kg by 2030.

Robust Infrastructure and Stability: With strong regulatory frameworks and political stability, Uruguay offers an ideal environment for long-term investments in clean energy projects.

b) The HIF Project in Paysandú: A Milestone for Uruguay

The announcement of the construction of a green hydrogen and eFuels plant in Paysandú, led by HIF Global, marks a US$ 4 billion investment. This plant is set to produce 256 million liters of eGasoline annually, contributing to the decarbonization of more than 150,000 vehicles per year. The investment includes US$ 2 billion for the construction of the plant and an additional US$ 2 billion for the development of wind and solar parks that will supply the renewable energy required to generate green hydrogen.

This project is a landmark in Uruguay’s second energy transition, placing the country at the forefront of green energy production worldwide. Uruguay’s first energy transition, completed over the past decade, enabled 98% of its annual electricity demand to be met by renewable sources such as wind, biomass, solar, and hydropower.

With sustained economic growth, social and political stability, forward-looking legislation, and privileged natural resources, Uruguay has become a global leader in renewable energy. Now, with green hydrogen and the promotion of electric mobility, the country aims to complete its transformation into a fully sustainable energy economy.