ATOME Energy has signed its first major 60MW Power Purchase Agreement in Paraguay, paving the way for large-scale hydrogen and ammonia production in the near future.
ATOME is pleased to announce the signing of a long-term power purchase agreement (PPA) with ANDE, Paraguay’s state electricity and power distribution company, for the supply of 60MW of green power generated from the country’s existing hydroelectric power resources. This is the largest PPA between ANDE and an industrial user that has ever been signed. The power will be priced at the lowest available industrial standard user tariff, allowing ATOME to compete effectively on both domestic and international markets. There is no cost associated with joining the PPA.
The power that is the subject of the PPA is already available through a new ANDE substation in Villeta, a major industrial center 35 kilometers downstream of Asuncion on the Paraguay River. Villeta is Paraguay’s main export port and home to a number of key industries, including fertiliser and cement companies, which are natural off-take partners for ATOME.
While the 60MW facility is world-scale in and of itself, the signing of this watershed agreement is the first in a series of ATOME’s large-scale green hydrogen and ammonia production units, and it is in addition to the 250MW+ planned facility in Paraguay that will use available power from the ITAIPU hydroelectric dam, the world’s second largest dam by output, on which planning work has already begun.
Steps to take next
Following the completion of the PPA, the project’s next steps include the planning, engineering, procurement, logistics, build out, and commissioning stages. All of these activities will necessitate careful coordination and management, but they will make use of existing technology and equipment.
In this regard, ATOME intends to appoint independent and experienced third-party owner’s engineers as soon as possible to manage and value engineer the project from conception to commissioning, as well as oversee the various contractors involved in delivering the facility on time and on budget.
ATOME intends to move quickly from the appointment of the owner’s engineer to the commissioning of the full FEED work (including procurement and financial planning) with an expected FID in H2 2022, with the goal of commissioning the facility and starting production at Villeta within three years.
Funding and off-take
ATOME will be able to service both domestic and export markets thanks to the facility’s strategic location in Villeta, which is convenient for off-taking. Because of the significant and expected long-term macro supply disruptions and the continued high price of fossil fuels, the Company is optimistic about future demand for its green hydrogen and ammonia offerings. The Company believes that ATOME’s location and access to existing power and infrastructure will reduce capex and opex, making the company more competitive in domestic and global markets.
The Villeta facility has the potential to produce up to 55,000 tons of green ammonia per year, and ATOME has already been approached by a number of potential off-take partners on their own, with more approaches expected as global demand for green fuels and fertilisers grows. Because of market volatility and the green hydrogen market’s relative immaturity, ATOME is taking a cautious approach to committing to any long-term off-take agreements.
ATOME has a variety of funding options available to it, and in any case, fully intends to take advantage of the many and varied grant and financial assistance options increasingly available for funding green infrastructure projects, and is already in contact with governmental and international multilateral bodies, as well as green infrastructure investment funds interested in investing at the project level.
