Enel Green Hydrogen Strategy, $423 M Chile Project, Eni 20 MW Plant, and 3 Key Industrial Partnerships (2021 to 2025)

Offtake Risk Mitigation, Enel Secures 25, 000 t/y with Industrial Integrations

Enel’s 2025 strategy directly counters the primary industry risk of project failure from weak offtake commitments by embedding hydrogen production within captive industrial demand, a stark contrast to the speculative model that led to widespread cancellations. As the global green hydrogen market undergoes a major correction in 2025, with over 75% of projects considered at risk, Enel is pursuing a pragmatic and de-risked path by prioritizing projects with guaranteed buyers in hard-to-abate sectors.

Enel’s Industrial Integration Model

Unlike competitors who pursued large-scale projects without secured buyers, Enel’s approach mitigates the offtake risk that has stalled the industry. This strategy is validated by the market’s “reality check, ” where strategic pivots and the absence of bankable purchase agreements account for a significant portion of canceled capacity. By focusing on tangible industrial applications, Enel builds a resilient foundation in a market grappling with economic viability.

• Between 2021 and 2024, the hydrogen market was characterized by hype and ambitious announcements. The shift in 2025 revealed a severe disconnect, with reports showing over 75% of the global project pipeline at risk of delay or cancellation due to elevated costs and weak demand.
• A prime example of Enel’s strategy is the $423 million green hydrogen project in Chile, greenlit in September 2025. It is designed to produce 25, 000 tonnes of hydrogen per year specifically for the local copper mining industry, directly replacing diesel fuel.
• This integrated model extends to its European operations, where Enel continues its joint ventures with Eni to develop green hydrogen projects at biorefineries in Gela and Taranto, Italy. These projects embed production directly at the point of consumption.
• This focus on secured demand stands in contrast to the broader market, where companies like Woodside Energy and Exxon Mobil have paused or re-evaluated large-scale projects due to uncertainty around offtake agreements and policy frameworks.

$423 M in Chile, Enel Targeted Capital Deployment for Green Hydrogen

Enel’s 2025 hydrogen investment is highly targeted, prioritizing projects with co-located renewable supply and confirmed industrial offtakers to ensure bankability amidst a market correction. Rather than deploying capital speculatively, the company focuses on regions with excellent renewable resources and established partners, a strategy designed to maximize the probability of reaching a final investment decision (FID).

Foundational and Project-Specific Investments

The company’s financial commitments are twofold: direct project investments like the one in Chile and foundational moves to secure low-cost green electricity, a critical prerequisite for competitive hydrogen production. This dual approach ensures both the supply of feedstock and the viability of the end-product.

• The most significant direct investment in 2025 is the $423 million commitment to the green hydrogen facility in Chile. The project will be powered by Enel’s own Valle de los Vientos wind farm, creating a vertically integrated and cost-efficient production cycle.
• In Italy, Enel’s joint venture with Eni progresses with the backing of EU funding under the IPCEI Hy 2 Use program. This financial support de-risks the development of electrolyzers at the Gela (20 MW) and Taranto biorefineries.
• In the U.S., Enel’s swap deal with U.S. Gulf Pacific Power in May 2025 increased its net consolidated green energy capacity. This move does not fund a hydrogen project directly but is a strategic investment to expand its renewable electricity supply for future North American electrolyzer projects.
• This focused spending contrasts with the industry trend where fewer than 10% of announced global hydrogen projects have reached FID, often due to an inability to secure financing without firm offtake agreements.

Table: Enel Key Hydrogen-Related Investments and Agreements (2025)

Enel 3 Key Alliances Drive Hydrogen Project Execution (2021 to 2025)

Enel mitigates execution and market risk by forming strategic joint ventures and partnerships that span the value chain, from technology development with startups to securing offtake with industrial giants. This collaborative model, similar to the captive demand approach used by Total Energies, is crucial for de-risking capital-intensive projects and ensuring alignment with established demand centers.

Partnerships for Industrial Scale and Technology Innovation

The company’s alliances serve two distinct purposes: securing large-scale industrial offtake and advancing next-generation technology to drive down costs. This dual focus addresses both the demand and supply-side challenges of the nascent hydrogen economy.

• The long-standing joint venture with energy major Eni is a cornerstone of Enel’s strategy in Italy. With EU funding secured, the partnership is focused on integrating 20 MW and 10 MW electrolyzers at refineries in Gela and Taranto, respectively, creating a direct pathway to decarbonize the refining process.
• To tackle the high cost of production, Enel is partnering with US startup Power to Hydrogen (P 2 H 2) to pilot advanced Anion Exchange Membrane (AEM) electrolyzers. This technology aims to lower capital costs by using non-precious metals, a key step toward making green hydrogen economically viable.
• Enel is also a member of the European CEO-Alliance and a participant in the “H 2.Ruhr” project in Germany, alongside Iberdrola and others. This collaboration aims to supply up to 80, 000 tonnes of green hydrogen and ammonia to the Ruhr industrial region, demonstrating Enel’s role in developing large-scale European hydrogen hubs.

Table: Enel Strategic Hydrogen Partnerships

Europe vs Americas, Enel Green Hydrogen Project Pipeline Focus

Enel’s hydrogen activities are geographically concentrated in Europe and the Americas, strategically leveraging established industrial bases in Italy and Germany while capitalizing on superior renewable resources and policy support in Chile and the U.S. This dual-continent focus allows the company to tailor its approach to different market structures and resource endowments.

• Europe (Italy & Germany): In Italy, the focus remains on integrated projects with industrial partners like Eni, where existing infrastructure and demand create a clear business case. In Germany, participation in the H 2.Ruhr project aligns Enel with one of Europe’s largest planned industrial hydrogen ecosystems. These activities build on foundational agreements established between 2021 and 2024.
• South America (Chile): The approval of the $423 million project in 2025 marks Chile as Enel’s most advanced large-scale green hydrogen endeavor. The country was selected for its world-class wind resources, which are essential for producing cost-competitive green hydrogen, and for the concentrated demand from its large mining sector.
• North America (U.S.): While Enel has not yet announced a major hydrogen production project in the U.S., its actions in 2025 are laying the groundwork. Securing PPAs with corporate offtakers like Meta and expanding its renewable asset base are critical steps to position the company to capitalize on powerful incentives like the $3.00/kg 45 V production tax credit.

AEM Electrolyzer Pilots, Enel Focus on Cost Reduction Technology

Enel’s 2025 technology strategy is centered on de-risking and validating next-generation electrolyzers to address the primary barrier to green hydrogen adoption: high production cost. Instead of waiting for market-wide cost reductions, the company is actively fostering innovation through its Hydrogen Industrial Lab and strategic partnerships.

• During the 2021-2024 period, the market was dominated by mature but less efficient Alkaline Water Electrolysis (AWE) and high-performance but expensive Proton Exchange Membrane (PEM) technologies. The high capital cost of PEM electrolyzers, in particular, remained a significant hurdle.
• In 2025, Enel’s technology focus is a strategic pilot of Anion Exchange Membrane (AEM) electrolyzers with Power to Hydrogen. This next-generation technology is significant because it aims to combine the low-cost materials of AWE (e.g., nickel, iron) with the high performance and flexibility of PEM.
• The primary goal of the AEM pilot is to dramatically reduce the Levelized Cost of Hydrogen (LCOH), which currently ranges from $3/kg to $9/kg. Success in this pilot could provide Enel with a significant competitive advantage by lowering the capital expenditure of the electrolyzer stack, which can represent up to 60% of total production costs.
• This hands-on approach to technology validation, conducted at its industrial lab, allows Enel to accelerate the cost-down curve and integrate new, more efficient hardware into its future projects.

SWOT Analysis, Enel Hydrogen Strategy and Market Position

Enel’s strengths in renewable generation and its pragmatic, de-risked strategy position it well in a volatile market, but its success hinges on converting pilots to commercial scale and navigating persistent industry-wide challenges of cost and infrastructure. The market correction of 2025 has validated Enel’s cautious approach, transforming what might have been seen as a weakness (modest scale) into a strategic strength.

• Strength: Enel’s massive renewable energy portfolio provides a critical competitive advantage by ensuring access to the low-cost green electricity required for hydrogen production.
• Weakness: The company’s hydrogen project pipeline, while strategically sound, remains in the early stages of development, with a heavy reliance on partners for execution and offtake.
• Opportunity: Favorable policy mechanisms, such as the U.S. 45 V tax credit and the EU Hydrogen Bank, provide significant financial tailwinds that can improve project economics and accelerate development.
• Threat: The primary external threat is the systemic risk of weak offtake demand and continued project cancellations across the industry, which could stall the development of supporting infrastructure and supply chains.

Table: SWOT Analysis for Enel Hydrogen Initiatives for 2025: Key Projects, Strategies and Partnerships

Enel 2026 Outlook, AEM Pilot and FID on Chile Project are Key

The critical path for Enel’s hydrogen business in 2026 depends on achieving a final investment decision (FID) on its Chilean project and demonstrating commercial viability from its AEM electrolyzer pilot with Power to Hydrogen. These two milestones will serve as crucial validation points for its technology-led and demand-focused strategy.

• If FID is reached on the $423 million Chilean project, watch for the signing of binding, long-term offtake agreements with mining companies. This would signal that Enel has successfully navigated the primary hurdle stalling the industry and could provide a bankable template for future projects.
• If the AEM pilot with P 2 H 2 demonstrates cost and performance targets, watch for announcements of this technology being incorporated into Enel’s next wave of projects. This would confirm a key competitive advantage in driving down production costs.
• These could be happening: Enel may leverage its expanded U.S. renewable portfolio to announce its first major green hydrogen project in North America, timed to capitalize on the finalized 45 V tax credit rules. Continued project failures by competitors could also create opportunities for Enel to acquire distressed assets or secure partnerships on more favorable terms.

The questions your competitors are already asking

This report covers one company’s strategy for de-risking green hydrogen projects. The questions that matter most depend on your work.

• Green hydrogen projects with secured offtake agreements
• Anion exchange membrane electrolyzer companies and progress
• Green hydrogen use in mining versus other industries
• Companies best positioned for US hydrogen production tax credit

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