An Examination of the Technical-Economic Feasibility of Green Hydrogen Production From Solar Clipping Losses in Northern Chile

Abstract

Over the past several years, Chile has sought to position itself as a leading country for green hydrogen production. This project analyzes the technical-economic feasibility of green hydrogen production from solar clipping losses in northern Chile. The target solar project falls under the Pequeño Medio de Generación Distribuido (PMGD) tariff category in Chile, which sets an injection limit of 9 MWac and results in solar clipping losses. We develop a financial model to analyze whether or not a green hydrogen pilot project at the solar plant is financially viable. Inputs include the estimated annual solar clipping losses (MWh), electrolyzer hydrogen production capacity (kg/MWh), and the estimated willingness to pay ($/kg) for green hydrogen from two domestic industries, mining companies and gas utilities. Our analysis indicates that the solar clipping losses business model does not produce enough hydrogen to offset the initial CAPEX investment based on the estimated prevailing green hydrogen prices in Chile.