Green hydrogen is gaining ground in Peru and is beginning to position itself as a competitive alternative in the region . Currently, costs range between USD 3 and 5 per kilogram , compared to 8 to 11 euros/kg in Europe and the United States, according to Edmundo Farge Inga , CEO of Batech Energy . The cost difference has two clear explanations: the price of solar electricity, which in Peru is between USD 30 and 40 per MWh , and the penetration of Chinese technology into the market.
" In Peru, Chinese technology is particularly advantageous for us, as it is gaining a strong foothold, while European technology is more expensive ," the engineer explained in an interview with Energía Estratégica.
According to Farge Inga, the CAPEX of a Chinese electrolyzer is already between USD 150 and 300 per kW , compared to 500 to 800 euros/kW for European manufacturers. The downward trend in technology prices is sustained. According to Farge Inga, the same thing that happened with solar panels ten years ago is happening with electrolyzers.
The executive explained that the costs of this equipment are steadily decreasing in the international market, especially due to supply from China, which could solidify the competitiveness of green hydrogen in the coming years. According to Bloomberg estimates, Peru, Brazil, and Chile could produce green hydrogen for less than USD 1/kg by 2030. Farge Inga confirmed this trend and added: " Green hydrogen will be so competitive that it will transform entire sectors : ammonia, energy, methanol, transportation. The market is already pointing toward that scenario."
Currently, projects in Peru are focused on the production of ammonia and methanol for export, as these are the most profitable industrial uses in the short term.
Not all sectors are competitive from the start.
Ammonia is profitable today, and that's why most of the projects under development in the country are focused on it, the executive emphasized. Hydrogen is also emerging as a solution to the solar energy oversupply expected in the coming years.
With the approval of the new regulatory framework, photovoltaic projects have multiplied in Peru.
When all those solar plants are built there will be energy surpluses, and at that point hydrogen will be competitive on its own.
The same thing happened in Europe and Chile, Farge Inga asserted. Meanwhile, the regulation of the sector still faces challenges.
Although Congress approved the Hydrogen Promotion Law in 2023, the regulations have not yet been defined.
The regulations are not ready because there are discrepancies: the Ministry is only focusing on green hydrogen, while the sector believes that all technologies should be promoted , the CEO stated.
According to the executive, the market must determine which type of hydrogen is most in demand at each stage: green, blue, or turquoise. The combination of low costs, abundant solar energy, and high international demand positions Peru on the global green hydrogen map.
"Just as in Europe they had to pay to produce solar energy due to grid congestion, in Peru we are heading towards that same oversupply, and there hydrogen will be the natural solution to make our energy matrix competitive," Farge Inga concluded.