Techno-Economic Evaluation for Renewable Deployment in Southern Chile: Expanding the Green Hydrogen Frontier

Chile stands out for its renewable energy resources and its commitment to developing green hydrogen. However, achieving cost parity with gray hydrogen remains an obstacle, mainly due to high capital costs and sensitivity to scale. This study assesses the technical and economic feasibility of green hydrogen production, using five different plants located in the Magallanes region in the south of the country as a reference. The model integrates a detailed framework of wind generation, PEM electrolysis, compression, and high-pressure storage subsystems, as well as a stochastic economic layer that combines the CAPEX, NPV, and LCOH assessments using Monte Carlo simulations. It also incorporates real-world capacity distributions and probabilistic fluctuations in systems. A sensitivity analysis confirms production scale as the main factor affecting profitability, with a break-even threshold of 0.5 MW. The results show that the LCOH decreases from 7.1 USD to 3.4 USD/kgH2 as capacity increases. The analysis reveals that only 23.88% of small-scale configurations yield positive NPV, underscoring the need for scaling to achieve economic viability.