Arequipa Announces Hydrogen Projects After Wave of Investments

ProInversión, a government agency dedicated to promoting private investment into Peru, has projected over 5 billion dollars’ worth of investment into the generation of clean energy in Arequipa, more than 60% of the total amount of investments awarded in Peru by 2024.

At a meeting held in May, the Regional Government of Arequipa revealed that foreign investors planned to invest around 35 million dollars into new industrial projects in Arequipa – including the construction of a new hydrogen plant in La Joya, a project initially planned for Chile that was found better suited to the Arequipan environment.

These investments were motivated by a government forum, titled “Arequipa: Destination and Global Supplier of Clean and Low-Carbon Energy” in which major players in both the public and private energy sectors were allowed to explore the opportunities that exist in the Peruvian region to set up renewable projects.

This week, it was announced that the financial entity INVEMA offered to finance and construct 2 desalination hydroelectric plants within the Arequipa region across 3 to 5 years via a long-term contract or power purchase agreement, which will ensure the purchase of the water and electricity produced by the plants, from either public or private companies.

According to Luis Núñez Torres, Strategic Planning Designer at INVEMA, each of the 3 plants is designed to generate 2,000 megawatts of 100% renewable energy, and would cost approximately 4 billion dollars.

The plants will use a new model of submarine hydroelectric power that makes use of the potential energy of the waves and ocean currents to produce large amounts of electricity at a low sale rate: seawater is boiled into steam and separated from the salt, before being steamed through pipes to areas as far as 100km away in the mountains, where it would be used to generate electricity in a thermoelectric plant.

The steam would then be cooled back into water, before being sent to a hydroelectric plant to generate more electricity and making up for any electricity lost during the desalination process. The drastically lower operating expenses of this method, as compared to others, will translate to lower overall production costs. According to Núñez Torres: “The sale of salt is a strategic asset, which would significantly reduce the prices of water and electricity. This would solve the main problem that green hydrogen is currently facing, which is the high price of electricity required to produce it profitably.”

“Submarine hydroelectric plants have a great competitive advantage over other renewable sources; they work 24 hours a day, 365 days a year, unlike solar energy that only works during the day, wind energy approximately 265 effective days a year, or hydroelectric plants that reduce their production in times of drought.”

At present, the locations of two of the three plants have already been decided: the first will be in Camaná, where it is expected to supply up to 182 million cubic metres of hydrogen annually at the Majes-Siguas II Project, which will irrigate up to 60,000 hectares within the area.

The second plant will be constructed in the Islay province, where it will irrigate approximately 150,000 hectares of cornfield to produce 900,000 tons of bioplastic.

“Taking into account all these factors, the price of the green hydrogen they can produce could achieve the selling price of one dollar per kilo of green hydrogen, which would be the lowest in the world.”