Arequipa Poised to Become a Leader in Hydrogen Production with New Investments

ProInversión projects that investments in clean energy in Arequipa will top $5 billion, representing over 60% of total investments in Peru by 2024. Key projects include a hydrogen plant in La Joya and innovative desalination hydroelectric plants.
The new investments are expected to significantly lower the cost of green hydrogen production, potentially making it the most affordable globally at $1 per kilo.

ProInversión, Peru's agency dedicated to fostering private investment, has announced a significant inflow of over $5 billion into clean energy projects in Arequipa, accounting for more than 60% of Peru's total awarded investments by 2024. This announcement followed a strategic meeting where the Regional Government of Arequipa disclosed plans from foreign investors to allocate approximately $35 million to new industrial endeavors, including a hydrogen plant initially designated for Chile but relocated to La Joya due to its more suitable environment.

These developments were spurred by a pivotal forum titled "Arequipa: Destination and Global Supplier of Clean and Low-Carbon Energy," which provided a platform for public and private energy stakeholders to explore renewable project opportunities within the region.

This week, further progress was reported as INVEMA, a financial entity, proposed the financing and construction of two desalination hydroelectric plants over the next 3 to 5 years through long-term contracts or power purchase agreements. These agreements are essential as they guarantee the sale of water and electricity produced by these plants to both public and private entities.

Luis Núñez Torres, Strategic Planning Designer at INVEMA, shared that each of the planned three plants would have the capacity to generate 2,000 megawatts of 100% renewable energy, with an estimated project cost of $4 billion. These plants will utilize an innovative submarine hydroelectric power model that harnesses ocean wave and current energy. This method involves boiling seawater into steam, which is then transported up to 100 km away to power a thermoelectric plant in the mountains. The steam is later recondensed into water, utilized again in a hydroelectric plant to generate additional electricity, thereby compensating for any energy lost during desalination.

Núñez Torres highlighted the economic benefit of selling by-products like salt, which could significantly lower the costs of water and electricity production. He explained, "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."

The first of the three plants is set to be built in Camaná, projected to supply up to 182 million cubic meters of hydrogen annually at the Majes-Siguas II Project, capable of irrigating up to 60,000 hectares. The second plant, planned for Islay province, aims to irrigate around 150,000 hectares of cornfields, with the produced biomass being used for bioplastic production.

Given the innovative approach and strategic use of natural resources, these projects have the potential to achieve a breakthrough in green hydrogen production costs, aiming for the world's lowest price at $1 per kilo of green hydrogen.

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