In the next months, Uruguay will conduct a tender for ten offshore wind power blocs covering an area the size of Delaware to evaluate investor demand for creating major green hydrogen projects in the southern Atlantic.

Chairman Alek Stipanicic of the state-owned energy company Ancap stated that the business intends to issue bidding rules for offshore blocks this year and select the winners in the second quarter of 2023. He is hopeful that some of the forty-plus oil drillers and renewable energy companies who inquired about the auction will make offers. The electricity is designated for electrolyzers that extract hydrogen from water.

Oil giants such as BP Plc and Shell Plc are transitioning to hydrogen at a time when nations are attempting to curb global warming and enhance energy security in the wake of Russia’s invasion of Ukraine. BloombergNEF estimates that the global production of clean hydrogen may increase 18-fold to 11,6 million metric tons per year by 2030 if governments provide substantial support.

In a good year, Uruguay generates more than 95% of its electricity from renewable sources, thanks to a decade of investments in wind, solar, and biomass energy. Now, President Luis Lacalle Pou’s administration is promoting Uruguay’s untapped renewable resources and tax incentives to position the nation to become a global exporter of hydrogen.

Germany’s Enertrag plans to construct 350 megawatts of solar and wind power in northern Uruguay beginning in 2025 in order to manufacture 21,000 tons of hydrogen annually. Enertrag will convert the hydrogen into 100,000 tons of e-methanol, which will be exported to Germany if possible.