Governments around the world have shown tremendous readiness to support the transition from carbon-emitting to clean hydrogen sources. A few years ago, that was not the case, but with the emerging technologies and some promising advancements, everyone now wants to be involved in the mix. That means the whole world seems to agree that for decarbonization efforts to be successful, there is a need to explore hydrogen.
Since November 2020 when it launched its National Green Hydrogen, Chile has made tremendous progress with many projects. Going by what it is currently doing, there is no doubt that it has a long-term goal regarding the production of green hydrogen specifically using the process of electrolysis using energy from renewable sources. There are also suggestions that it is likely to consider exploring Blue hydrogen using natural gas though it has not made public any such plans or confirmed whether it, indeed, intends to do so anytime soon.
Now, taking a look at Chile, one can easily ask why its role in the transition from fossil fuel sources to clean options is very vital. Well, based on numerous expert reports, Chile enjoys a competitive advantage in green hydrogen production. That means if it exploits its potential fully, it could become one of the leading exporters of hydrogen in the world. A few challenges, however, remain a great impediment to its progress in the sector.
One of the major challenges Chile now faces is the cost of electricity supply that is needed to drive production activities. Currently, up to 80% of the cost of hydrogen produced in Chile is attributable to power. So, for it to realize its potential of becoming a leading importer, it has to reduce the cost of production significantly. Thankfully, it has renewable energy from solar and wind specifically in the Magallanes area. If this area is used properly, there are projections that the cost of producing hydrogen might drop to levels that will make Chile a competitive producer worldwide.
Storage and transportation challenges are also some of the other factors that could derail the growth of Chile’s hydrogen sector. For this reason, there is a need to identify efficient transportation options. Further, processes that can help liquefy hydrogen can assist in reducing the high costs of storing as well as moving hydrogen from one place to another. There have also been talks about the need to transform hydrogen into ammonia before exporting it. If all of these can be done soon, and, indeed, the government of Chile is ready to do so, competitive export of hydrogen might become a reality.
Other issues that have also been singled out include human resources and desalinization. With regards to desalinization, there is a need to find reliable sources of freshwater for hydrogen making. This has to be done specifically in areas where salty water could increase the cost of production to levels that are not sustainable. On human resources, there is a need for capacity development bearing in mind that the hydrogen sector is a relatively new field. Chile, therefore, needs to get the best brains to steer its hydrogen sector if it wants to enjoy a competitive advantage and become a world leader in production and export.
Overall, the hydrogen sector in Chile looks promising. All that the sector needs is regulation and incentives for investors willing to come on board. Thankfully, Chile is providing a conducive environment and is also taking all the right steps to fully develop its hydrogen sector. If the trend continues, then the country is no doubt on its path to becoming a great player in the transition efforts from fossil fuel to clean hydrogen across the world.
