Power-to-Liquid fuel export potential from Chile to Europe on the pathway to carbon neutrality

Power-to-Liquid (PtL) fuels will be vital in achieving carbon neutrality. This study uses a energy system optimization model to analyze the market-based export potential of PtL fuels from Chile on the path to 2050. The sector-integrated energy system model minimizes the of capacity expansion in five-year steps. Our analysis shows that under the assumptions made, Chile is able to phase out the use of fossil resources and significantly export Fischer-Tropsch fuels in 2030, 2040 and 2050 at competitive marginal costs. The study focuses on the impact of export volumes, CO2 budgets, and expansion limits for 2030, 2040, and 2050. The model results show that the production of PtL enables the connection of level 1 renewable resources in remote, off-grid regions in Chile to global demand centres. The achievable export volumes and corresponding costs are discussed from a European perspective. Finally, it is presented that the necessary expansion rates for Chile’s wind and solar power plants must be significantly higher than historical values in all cases.