Uruguay Green Hydrogen Project Advances as UTE Price Gap Narrows

By The Rio Times | Created at 2026-08-30 13:41:23 | Updated at 2026-08-30 15:20:47 3 hours ago

Uruguay · ENERGY

Key Facts

—Date Orsi said the green hydrogen plant numbers had moved closer on August 28, 2026.
—Price HIF Global has asked for US$40 per megawatt-hour since 2023, unchanged.
—Size The green hydrogen plant would run a 1.1 gigawatt electrolyser in Paysandú.
—Investment The December 2025 memorandum values the project at US$5.385 billion.
—Status No contract exists, and the final investment decision is expected next year.

The state utility and HIF Global are closer on the power tariff for the green hydrogen plant, yet no contract and no investment decision exist.

Uruguay’s president said the price gap holding up a green hydrogen plant in Paysandú has narrowed. Yamandú Orsi spoke in Guichón on August 28, and urged caution about what comes next.

Wind turbines turning above pasture land in northern Uruguay

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What Orsi said in Guichón

President Yamandú Orsi was asked on August 28 about the state of the talks. He answered that the project keeps moving, and that the numbers had come closer.

The remark referred to the power tariff under negotiation with UTE, the state electricity company. Its full name is Administración Nacional de Usinas y Trasmisiones Eléctricas, and it buys and sells almost all Uruguayan power.

Orsi spoke after inaugurating the first stage of a rehabilitation of Ruta 4 near Guichón. He asked to be very prudent about the tariff, and gave no figure.

He linked the timing to the international hydrogen market, which he said would shape the final schedule. He also said moving the plant to a new site means fresh environmental impact studies.

The number that decides the project

HIF Global has asked for electricity at US$40 per megawatt-hour, and says it has not moved since 2023. Martín Bremermann, chief executive of HIF Uruguay, repeated that figure to reporters in March 2026.

Large industrial users in Uruguay pay between US$60 and US$80 per megawatt-hour, the Paysandú daily El Telégrafo reported. The distance between those numbers is what the green hydrogen plant talks are about.

In July the same paper reported a landing zone near US$45 per megawatt-hour, citing the agency Uypress. Neither UTE nor the executive has published a tariff formula, so that figure remains unconfirmed.

Alejandro Sánchez, secretary of the presidency, said on July 10 that UTE and the company had agreed a formula. HIF Uruguay declined to comment, and Industry Minister Fernanda Cardona said days later that no contract existed.

Why the power bill dominates the maths

Electricity accounts for about 70% of the plant’s operating cost, Bremermann told reporters. Roughly 70% of that power would come from the company’s own solar and wind parks.

The remaining share would come from the grid, to fill the gaps when wind and sun fade. That firming role is precisely what UTE has to put a price on.

The company plans a wind farm called Elena rated at 1,137.6 megawatts and a solar park called Lucía at 1,162 megawatts-peak. Both are dedicated to the green hydrogen plant rather than to the national grid.

Bremermann said rivals quote lower power prices, naming Paraguay at US$25 and Chile at US$32 per megawatt-hour. He put Brazil at US$36, and said Uruguay had not reached US$40.

What the complex would build and make

The December 2025 memorandum values the investment at US$5.385 billion, the largest ever announced in Uruguay. Industrial plants account for US$2.881 billion of that total.

Renewable parks take US$1.277 billion, and infrastructure, effluent treatment, water supply and power transmission take US$1.226 billion. The complex is designed in four modules rather than one build.

HIF Global’s own project page lists a 1.1 gigawatt electrolyser and about 876,000 tonnes of e-methanol a year. Part of that methanol would then be converted into synthetic gasoline and liquefied gas.

Carbon dioxide would come from bioethanol production at ALUR, the state ethanol arm Alcoholes del Uruguay. The company says 150,000 tonnes a year are secured, with other biogenic sources to follow.

Water for electrolysis and cooling would come from the Río Uruguay, which forms the western border. A researcher at the Laboratorio Tecnológico del Uruguay put the intake near one thousandth of the river’s low flow.

The move that reset the environmental file

HIF Global filed its prior environmental authorisation application on March 13, 2026, for a site at Constancia. That location sits about 15 kilometres from Paysandú city, close to the river.

Since then the government and the company have discussed moving the works closer to town. Reports place the new site beside the Portland cement plant of ANCAP in Nuevo Paysandú.

ANCAP is the state fuels company, formally Administración Nacional de Combustibles, Alcohol y Portland. Its land sits near ALUR, which would shorten the carbon dioxide link and remove three planned pipelines.

Orsi confirmed on August 28 that the move requires new environmental impact studies. The area and legal terms of the new site have not been officially published.

Argentina drops its court challenge

Three legislators from Entre Ríos had gone to court in Argentina over the project. They are Guillermo Michel, Marianela Marclay and Adán Bahl, and their action has now been withdrawn.

Orsi called it a criminal complaint, but it was filed in March as a civil damage prevention claim. It questioned the procedure followed under the Estatuto del Río Uruguay, the shared river treaty.

The case had advanced a week earlier with a judicial inspection on the shoreline at Colón. Its withdrawal removes one cross-border obstacle in front of the green hydrogen plant.

Colón lies across the water from the original Constancia site, and its tourism sector objected loudly. Uruguay’s electoral court separately rejected a departmental plebiscite against the project in July.

What is still missing

There is no signed investment contract, and no final investment decision has been taken. Cardona said in July that the company would decide next year.

The Rio Times reported on August 10 that a decision was expected in late 2027 or 2028. Bremermann had earlier aimed to close the financing by the end of 2026.

Rail access charges, freight to the port of Montevideo and who pays for the grid connection all remain open. First exports have been projected for 2029, mainly to Germany.

HIF Global says the first module’s output is fully sold, and construction would average 1,400 workers. Operations would employ about 300 people directly, plus roughly 100 at the renewable parks.

The domestic argument about the tariff

The staff association at UTE rejects the negotiation as opaque and says it would decapitalise the public company. It puts the proposed price at about half the market value.

The union warns of knock-on effects on household tariffs, network investment and social programmes. The government has published no figures that would settle the argument either way.

Opposition leader Álvaro Delgado warned in August that Uruguay risked losing the investment altogether. Frente Amplio chair Fernando Pereira replied by asking whether the country should give the energy away.

Orsi framed the wider problem as the absence of a stable energy framework for large projects. He said Uruguay bargains case by case with pulp mills, data centres and now the green hydrogen plant.

Frequently Asked Questions

What exactly are UTE and HIF Global negotiating?

The price of the electricity UTE would supply to the green hydrogen plant, and who funds the grid connection. No tariff formula has been published.

Has Uruguay approved the project?

No approval exists yet. A prior environmental authorisation application was filed in March 2026, and the proposed relocation now requires new studies.

When would the plant start exporting?

First exports have been projected for 2029, mainly to Germany. That date depends on a final investment decision that has not been taken.