In Chile’s Atacama, green energy collides with space research

The natural attributes of Chile’s Atacama Desert, its dark and clear skies, are now colliding over a $10 billion renewable energy project that astronomers say would blur their vital study of the universe from nearby space observatories.

At a Pacific coast site in Chile’s Antofagasta region just a few kilometres from telescopes run by the European Southern Observatory (ESO), the U.S. electricity giant AES plans to develop an industrial complex to manufacture and export green ammonia, a carbon-free derivative of green hydrogen that is separated from desalinised water using renewable energy.

This proximity lies at the heart of the impasse.

Light pollution, air turbulence, vibrations and dust generated by the power company’s INNA green ammonia project would have an “alarming” impact on space observation from telescopes in northern Chile’s astronomy heartland, according to ESO. “If we have a big project so close to the observatory, it’s very hard to coexist,” said astronomer Itziar De Gregorio Monsalvo, ESO’s representative in Chile.

Tensions between AES and ESO have been building for years. In 2020, the generator applied for an environmental permit to develop the 863-megawatt Terra solar and wind energy complex in Taltal municipality. The $750 million project was permitted in 2023 but never built. Then last year, AES filed for another permit to harness future renewable energy from Terra to make green ammonia.

In multiple meetings between the two sides, ESO repeatedly raised its objections with AES executives, even turning up at a community meeting to which it was not invited to air its concerns, De Gregorio said. Their face-to-face meetings “weren’t dialogues, they were monologues, and they were always coming to us to ask for things,” De Gregorio told Gas Outlook. ESO provided technical input and studies, but AES executives seemed unswayed, she said.

AES Andes, the utility’s local subsidiary, says INNA aligns with Chilean regulation governing light pollution and other impacts. INNA “is a project that we have developed over five years so that it would be compatible with the astronomy, complying with absolutely all of the current norms,” AES Andes chief executive Javier Dib told a green energy conference in Punta Arenas in southern Chile on March 24th.

“We are sure that this project, with the very robust system of environmental evaluation that Chile has, will be correctly evaluated and we will be able to develop it efficiently very soon. It’s a very beautiful project,” he said.

De Gregorio said Chile updated its regulations for light pollution last year, but more needs to be done to take into account light quality in line with new international astronomical standards.

Thirsting for ammonia

Green ammonia offers Chile an opportunity to diversify its export portfolio that has long been dominated by copper. The new resource can be used to make fertilisers in place of conventional ammonia derived from gas. It can also be used in power generation or maritime transport as a carbon-free alternative to fossil fuels. And it can be an efficient carrier for green hydrogen. This is why green ammonia is the derivative of choice for most of the green hydrogen projects in Chile, including a European-led strategic cluster in the country’s deep southern Magallanes region.

Chile is eyeing European and Asian markets for its green ammonia. Japan, for example, is currently conducting a tender for 15-year “contracts-for-difference” for imported low-carbon hydrogen and derivatives, including green ammonia that it would use for co-firing in thermal power stations and other applications.

The CfD mechanism subsidises the gap between a gas-linked reference price and a bidder-proposed strike price for the green products, which are still not yet commercially viable without such support.

As a free trade partner of Japan, Chile is considered well-positioned to compete. And at first glance, AES appears to be in a pole position to become one of Japan’s suppliers.

AES Andes plans to install the integrated INNA complex in the windy coastal municipality of Taltal, where other companies such as France’s Engie have already built renewable energy plants. INNA would produce 650,000 tonnes per year of green ammonia from 100,000 t/yr of green hydrogen.

According to an ESO analysis, INNA would increase light pollution above its Very Large Telescope (VLT) by at least 35% and by more than 50% above the planned south site of its Cherenkov Telescope Array Observatory (CTAO-South). Air turbulence and vibrations could also impair observations from the Extremely Large Telescope (ELT) planned for the Paranal Observatory, according to ESO.

INNA is only around five km from CTAO-South and 11 km from VLT. ESO wants the project to be moved at least 50 km farther away depending on how much light it generates.

Chile´s growing community of astronomers has chimed in too. INNA “would positively impact the country’s energy development, this should not impede the scientific-technological progress that comes with astronomy in Chile,” the Chilean Astronomy Society (Sochias) told Gas Outlook in a statement, adding that it anticipates a reformed government decree that preserves territories deemed valuable for scientific research.

So far, AES Andes has resisted calls to move INNA farther away from the telescopes. “There is no way to move it,” Luis Sarrás, AES Andes green hydrogen director for South America, said in a recent radio interview. “The only thing that could be done is to cancel the project and see if we would want to do another project in another place.”

The company declined an interview request by Gas Outlook.

Chile’s Foreign Ministry has sought to mediate the dispute, reminding the environmental evaluation agency of the country’s international commitment to astronomical research, but without officially taking sides.

Star-studded quandary

Once a leader in thermal generation in Chile, AES Andes has swung aggressively into renewable energy in recent years, especially in Chile which is central to its portfolio outside of the U.S. Since 2018, the company has invested $2.3 billion to incorporate 2.2 gigawatts of renewable energy, Dib said. AES plans to invest another $4.4 billion in renewables through 2030. The focus is on battery storage, which the company is seeking to boost to 1.7 GW from a current 451 MW, the largest battery portfolio in Latin America.

For now, Chile’s glacial permitting process means the quandary is likely to be inherited by the next administration. Incumbent president Gabriel Boric, who ran on an environmental platform, is barred from running for another consecutive term. His administration is currently promoting a bill to streamline permitting, with an eye toward stimulating foreign investment.

AES is hardly the only project developer to run into headwinds in northern Chile, where mining is the main industrial activity. Elsewhere in Taltal, Chilean generator Colbun late last year withdrew its permit application for an innovative pumped storage project in response to resistance from local communities. But AES Andes is the first to face public pushback from astronomers.

“We don’t oppose the green hydrogen industry. We think it’s wonderful,” De Gregorio said. “But it’s simply unnecessary to put it in this place, because there’s a lot of room for them.”

(Writing by Patricia Garip; editing by Sophie Davies)