RIO DE JANEIRO, BRAZIL – Chile could produce green hydrogen at a very low price, being highly competitive worldwide, and able to have an installed capacity of 25 Giga Watt by 2030, according to McKinsey & Company, a global consultancy in strategic management, based in New York.
The Ministry of Energy projects an industry with 9 billion dollars on that same date, supported by the National Green Hydrogen Strategy, which aims to position Chile as one of the three most essential exporters globally by 2040. The key is to lower the cost of production to less than two dollars per kilo, from the six dollars per kilo that it currently costs to produce in the country.
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But what is this energy that is on everyone’s lips, that could supply 70 times the energy needs of the country, and that promises to turn Chile into an exporter, due to the privileged exposure to solar radiation from Coquimbo to the north and the force of the wind in the southern zone.
LET’S TAKE IT STEP BY STEP
Hydrogen (H) is the most abundant chemical element in the universe (75% of the visible matter in the cosmos), being the fuel for stars in the form of plasma. On Earth, it is very scarce since it exists as diatomic gas (it has two atoms) H2, which is very light to stay on the surface (it weighs 15 times less than air).
It is highly flammable, colorless, and odorless, and the H2 molecule has a high energy density per unit mass: three times more than gasoline and 120 times more than lithium batteries.
In addition to green fuel, hydrogen is an input for various industries that use fertilizers, ammonia, and methanol, an alcohol used as non-polluting synthetic gasoline.
But on Earth, H2 is not found on its own. The most abundant is when it is coupled to oxygen, forming water, in the well-known formula of H2O (two atoms of hydrogen and one of oxygen). So, to obtain this potent gas, it is enough to separate both elements from the water.
The problem occurs because more energy is required to produce H2 (elemental dihydrogen) than combustion. Electrolysis is one of the methods used to make H2, which consists of using electricity to separate molecules from water. It can also be obtained from methane, a potent greenhouse gas that is not environmentally friendly.
To start electrolysis, there is gray hydrogen (obtained from hydrocarbons), blue hydrogen (from natural gas), and green hydrogen, produced through non-conventional renewable energies, such as electricity obtained from solar radiation and wind power.
Thus, the equation that must be considered for green hydrogen is the use of cheap energy that does not emit greenhouse gases, then liquefying it, storing it, and transporting it through pipelines or trucks to the end-user, which can be industrial (ships, mining trucks, among others) or for use as fuel in cities, mainly in transport (buses, private vehicles).
In short, green hydrogen is a secondary energy element obtained through another secondary element – electricity – based on solar radiation, winds, and geothermal energy. The machine that separates molecules from water is called an electrolyzer.
CHILE’S FIVE CHALLENGES
Engineer José Miguel Arriaza directs the degree in Energy Engineering and Environmental Sustainability at San Sebastián University (USS) and closely follows everything related to green hydrogen and the country’s challenges to make this decisive competitive advantage a reality.
“The first challenge is to lower the production costs of renewable energy,” says the academic. The country has given itself a regulatory framework to promote these energies (solar and wind), going from zero to 20 percent of the energy matrix in the last ten years. But to reach 100 percent, it is necessary to continue encouraging them and taking privileges away from conventional fossil fuel plants.”
Arriaza adds that “then comes the production of hydrogen itself. Chile, just two years ago, finished studying the regulation required to implement a hydrogen plant from a technical point of view. The Superintendency of Electricity and Fuels (SEC) worked on the security elements that must be met to develop projects to generate this energy.”
However, the USS academic affirms that “there are still many doubts regarding the environmental and safety compliance to build a plant and transport the hydrogen produced there. Everyone is waiting for who takes the first step, and I think the State has to break the status quo so that the projects can begin to be built.
Also, from the economic point of view, it is necessary to know if there will be a tax benefit for the projects to be developed and thus incentivize the market. Corfo is already doing something in this regard, but it is necessary to deepen state support.”
As a third challenge, he adds that “the formation of human capital is fundamental for this industry, which will require chemical, mechanical and electrical civil engineers; and very importantly, environmental engineers or energy and ecological sustainability engineers, such as the one taught at the USS.
They have widely requested careers today in the renewable energy industry, and it is estimated that by the year 2050, Chile will need more than one million people to move the renewable energy industry.”
The fourth challenge is basic economics, the game of supply and demand. Arriaza expresses it in the famous phrase, “what comes first, the chicken or the egg? Let me explain: who will bear the cost of building a plant without having the certainty of securing a buyer that will push the demand. It is said that the mining sector could be a great demand for this fuel. The market is at that stage of rapprochement, but it is lacking maturation, more trust is required between the supply and demand actors. Today the first projects are advancing, but more from the conceptual point of view and their environmental processing.”
Finally, looking at the processes of political changes that are taking place in the country in the hands of the Constitutional Convention, Arriaza believes that it is also a significant challenge for the Convention to know the potential that the government has to develop energy from its sources so that it is expressed in the new text.
“We know that Chile was not blessed with having oil or gas, but we must recognize that Chile has a lot of future energy from solar radiation and wind power. It is a possible dream to stop depending on the fossil energy that comes to us in ships and recognize the advantage we have as a country today,” Ariazza says.
The future of Chile depends on energy independence and exporting the surplus. For example, the interconnection with Peru is being worked on in order to bring solar energy produced in Chile. It is possible that South America, as a subcontinent, is connected, as it happens in Europe.”