Energy Transition - ANCAP
The Green Hydrogen Roadmap in Uruguay [1] was launched in 2022 by the Ministry of Industry, Energy and Mining (MIEM) in collaboration with other national organizations members of the inter-institutional group for green hydrogen development. Within the framework of this roadmap and with the objective of promoting the development of green hydrogen in Uruguay, the H2U Program is implemented, with several chapters, including offshore (H2U offshore) [2].
Uruguay has an excellent offshore wind resource and a wide continental shelf with shallow water depths, which makes it very attractive for the production of hydrogen and derivatives from offshore wind energy.
In almost 15 years of leading the Uruguay Rounds for oil and gas exploration and production, ANCAP has built capacities, acquired technical information, developed commercial relationships, promoted, designed, awarded, and managed contracts with leading international energy companies, who have made large investments at their cost and risk.
Based on this experience and knowledge, ANCAP is leading the H2U Offshore chapter of the Hydrogen Roadmap through a system of international tenders (rounds) for the production of hydrogen and derivatives from offshore wind by private parties at their own cost and risk. Since November 2021, more than 100 meetings have been held with more than 70 companies interested in this development. In addition to the exchange with the industry, ANCAP has the technical support of the IFC - World Bank [3].
Currently, there is a first draft of the bidding terms and contract model, which are expected to be officially launched during 2024. Additionally, the scheduling of virtual data-rooms is available so potential interested parties can access to the information currently available offshore Uruguay to carry out preliminary feasibility studies.
The contract model is based on O&G production sharing agreements, adapted with elements of current tenders for offshore wind energy globally. As in offshore O&G projects, the main product will be molecules (not electrons). Instead of gas and/or oil, it is hydrogen and/or derivatives. The contracts include an evaluation period with different sub-periods with incremental commitments. The evaluation period has a maximum duration of 10 years and its objective is for the contractor to be able to carry out the proper feasibility study to propose a development and production plan at the end of the period. Given the particular challenges of these types of projects, a contract characterized by flexibility and sufficient duration has been generated to be able to carry out the proper evaluation of projects of great potential (several GW), but with very low initial commitments.
For the first instance, the current proposal is to offer 4 Areas that are shown in Figure 1. These were defined considering ecologically relevant elements, and to minimize interference with human activities (transit and maritime operations, fishing, submarine cables) as well as industry and specialist input. With an average surface of approximately 700km2, these Areas and are located more than 43km from the coast in water depths between 20 and 50m.
Figure 1 – Proposal of Areas to offer in the first instance of the H2U offshore Round
If more than one offer is submitted for a certain Area, the awardee will be decided based on an objective and transparent evaluation method that considers economic parameters, as well as those related to the commitment to acquire new data.
Only qualified companies will be able to submit offers. To qualify, companies must present legal, economic-financial and technical information. The qualification enables the submission of offers, but does not oblige to make offers. The possibility of participating through consortiums is open both in the bidding stage and throughout the life of the contract.
More information about the H2U offshore round can be found at https://www.ancap.com.uy/14816/6/presentations.html
Note: The information regarding bidding terms, contract model, schedule, regions and areas is tentative and should be considered as a draft. Official and final version of this information will be released once the bidding terms are approved and published.
Useful links:
(1) Roadmap for Green Hydrogen in Uruguay
(2) Resolution of the Presidency on the H2U Program; December 2022
