Opinion Column

Never has the role of hydrogen been so evident for our sustainable growth

Publicado: April 28, 2021

Taking firm steps towards the so-called ‘energy transition’, which is now critical for the decarbonization of the planet and, therefore, critical to combat an even more aggressive pandemic than Covid-19, climate change challenges us to take this road not only as a country, but also to assume a role of global leadership. Chile currently has the opportunity to demonstrate that productive, inclusive, and sustainable development can be achieved. Our country’s privileged conditions, with 51.9% of the energy matrix in renewable energies and a projection of the Government of 100% by 2050 (which by the way is expected to happen even earlier), places us in an exceptional position to be world leaders in producing green hydrogen at the lowest cost worldwide.

‘FUEL OF THE FUTURE’

The so-called ‘fuel of the future’ will play a relevant role in the carbon neutrality goal. The expectations are, that it will be responsible for 26% of global emission reductions by 2050 (IRENA), a reduction that in a national context is projected to be 21%. This is understood by a number of countries that have already started out on this race that is driven by the reduction of costs in technology. There are 18 countries that already have established roadmaps (70% of global GDP), to which Chile has joined by launching the National Strategy last November, aiming to position the country as a world leader in green hydrogen exports. The projection of this market is auspicious.

By doing so, they will be able to offer additional support and resources, creating opportunities for all those interested in the 5 Principles, to join in related activities to promote better interactions and contribute to children’s learning and development.

Chile has a unique opportunity to change the way energy is generated and consumed”

This new industry is expected to reach the relevance that the mining, forestry, or food export sectors, to name a few, have. Over the next ten years, an estimated amount of US$ 475 billion is expected to be invested in the hydrogen industry worldwide. Chile is also expected to capture around 5%, or about US$ 23.5 billion, reaching a market of at least US$ 10 billion per year in exports. Today, the production cost of green hydrogen in Chile reaches US$ 5 to US$ 6 per kilogram of hydrogen, which is still very high, but within a decade, its cost are estimated to reach US$ 2 to US$ 2.3 per kilogram. Nevertheless, Chile is far more ambitious projecting that the cost could range between US$ 1.3 and 1.8 USD/Kg by 2030, combined with the lower price of renewable energy in the country.

WIDE-RANGING ADVANTAGES

The applications of this fuel -produced through water electrolysis and renewable energy-, are very diverse. They could be related to the development of local fertilizers, chemical use of ammonium, production of methanol or synthetic gasoline, among many others, offering wide possibilities to reduce the carbon footprint in local industries such as mining, agriculture and, most importantly, in transportation. The latter is the industry responsible for 24% of total CO{-2} emissions in Chile, and its main challenges relate to achieving the scalability of this type of technologies in operations with high energy demand, such as vessels, mining vehicles, trucks, buses, among others. Thus, the use of hydrogen offers comparative advantages in those operations that consider long distance trips and/or for cargo transportation, mainly given it provides high autonomy without adding more weight to the vehicle.

Chile has a unique opportunity to change the way of generating and consuming energy. Today we can not only aspire to the decarbonization of our energy matrix, but we can also contribute to the decarbonization of other countries that through the exportation of green products, such as hydrogen and its wide range of applications, could help to achieve the carbon neutrality goals of international actors. The transition to net-zero energy through green hydrogen will demand an unprecedented collaboration between the public and private sectors where the long-term vision and investment associated with the boost of this industry is a critical element. Fundación Chile in its firm purpose to promote Chile’s sustainable development, as well as it enabled the solar industry, intends to be a protagonist in this new industry, supporting projects throughout the value chain, but mainly through funding and know-how in the early stages.

We will seek to accelerate the deployment of large-scale green hydrogen technologies, including demand-side projects to achieve price discovery, accelerate the adaptation of associated regulation, reveal current and projected scale economies, thus increasing the development of this market. We want to contribute once again to ‘pave the way’, so we may demonstrate that the initiatives are not only viable, but will be critical to achieve the goals set by the country and the various industries in this race to decarbonize the planet. We firmly believe that sustainability is a driver that fosters innovation and entrepreneurship, and that once again this is an opportunity for our country to position itself as a strategic pole for the challenges of the future. Challenges of sustainable growth and better quality of life for the society.

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