American investors' multi-billion-dollar green hydrogen and ammonia plant in Chile seeks approval
The Volta project aims to draw on high solar power potential in the Atacama Desert to power cheap renewable NH3 production at the port city of Mejillones
The Port of Mejillones, northern Chile.Photo: Puerto Mejillones
A $2.5bn green hydrogen and ammonia project in northern Chile that will utilise solar power from the Atacama Desert region has filed for environmental approval from Chilean regulator SEIA.
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The developer, Mejillones Ammonia Energy (MAE) — founded by a group of US investors headed by James Calaway, chairman of lithium mining firm Ioneer — plans to start producing up to 300,000 tonnes of NH3 from the first phase of its “Volta” project by the end of 2027.
MAE reportedly plans to build 600MW of solar farms to power its facility, with water supply from existing desalination plants and wastewater.
The Volta project will be located in the port city of Mejillones in the northern Antofagasta region, bordered to the east by the Atacama desert, which has the highest solar irradiance per square metre in the world.
This solar power potential, along with strong and consistent winds in the southern Magallanes region, could make Chile the cheapest place to produce green hydrogen and export it as ammonia to import markets in Europe and Asia — although the latter will depend on the cost of shipping and perhaps reconverting NH3 back to H2.
James Calaway, founder and chairman of Mejillones Ammonia Energy.Photo: Mejillones Ammonia Energy
Chile’s government targets a levelised cost of production below $1.50/kg by 2030, with at least 5GW of electrolyser capacity installed by 2025.
However, while a number of pilot projects, such as HIF’s e-fuels plant in Magallanes and Engie’s electrolyser in Quilicura, have already started producing H2, development of large-scale projects has been much slower due to a lack of firm offtake agreements for hydrogen or ammonia in the global and domestic markets.
The Chilean government is due to open a $1bn fund providing loans with preferential rates for green hydrogen projects in the country in the latter half of this year. Three quarters of the fund is backed by US and EU development finance institutions.
The government has also opened up applications for a tranche of funding to co-finance small-scale projects to directly use H2 locally, with a maximum electrolyser size of 500kW.
