Paraguay’s National Administration of Electricity (ANDE) signed a new MoU this week with MET Development and FerSam Uruguay to develop a 100% renewable energy-powered fertiliser plant (Spanish language) in Alto Paraná. Hydroelectricity from the nearby Itaipu Dam will power green hydrogen production, which will then be utilised to produce ammonium nitrate fertilisers.
In an interview with Paraguayan press, FerSam representative Rossana Báez Mendoza noted that low-cost hydroelectricity was central to negotiations, with the parties agreeing to a guaranteed supply of 350 MW (half of the output of one of Itaipu’s twenty turbine generating units). Construction is expected to start in 2023, with operations commencing by 2026. At full capacity, the plant will produce 500,000 tonnes of renewable fertiliser every year.
Both companies undertook to collaborate in the creation of favorable framework conditions to carry out the necessary feasibility studies for the project, if it is carried out, the installation of the fertilizer production plant will require an investment of approximately 850 million dollars. and the creation of about 1,000 jobs with local labor, which is expected to make a strong contribution to the implementation of a sustainable green economy.Italian capital companies express interest in fertilizer production in Paraguay (Spanish language), 18 Nov 2021
National roadmap for Paraguay
The new project fits neatly into Paraguay’s national green hydrogen strategy. In June, Paraguay’s Vice Ministry of Mines and Energy released its report Towards the Green Hydrogen Roadmap in Paraguay (click to download pdf), setting out ambitions for the end of this decade:
Considering this scenario for implementing hydrogen as an energy vector, it is possible to estimate that it will be necessary to have an installed capacity of around 600 MW or an annual production of 90,000 tons of H2 by 2030,6. Hydrogen Potential in Paraguay, in Towards the Green Hydrogen Roadmap in Paraguay, June 2021
which could be used mainly as fuel for the cargo and passenger transport sector, both for overland and river transport. This reduction could avoid the emissions of 1.3 million tons of CO2.
More green ammonia powered by Itaipu Dam
ATOME Energy (already in the Ammonia Energy headlines this week with new announcements in Iceland) announced plans for a 250 MW green hydrogen & ammonia production plant in the Itaipu Technology Park.
In an interview with S&P Platts, ATOME CEO Olivier Mussat points out that, while Itaipu Dam provides nearly 90% of Paraguay’s electricity demand, the country uses less than 30% of its total hydroelectricity allocation from there and remains a big importer of energy and fertiliser products. A domestic green hydrogen industry represents a great opportunity to boost the local economy, better utilise available energy resources and replace imports with a locally-produced product (this also kick-starts the decarbonisation of transport via hydrogen fuel).