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The H4D member also highlights the potential that Chile has in this industry, thanks to renewables.
Published by El Mercurio, Chile | November 1, 2023 (Original in Spanish)
Tomás Vergara P.
“We are far, but the goal is that at the end of the day, everything that runs on diesel today, for example heavy transport, heavy machinery, ships, everything that runs on diesel in principle can run on hydrogen.
Becoming more independent, especially when you are moving the system from fossil fuels to clean energy, one of the main benefits that you begin to develop is the certainty about costs.”
The World Bank has been one of the institutions promoting the various initiatives that the Chilean Government, and Corfo have carried out to advance the green hydrogen industry.
During his visit to Chile, the Global Director of Energy and Extractive Industries of the World Bank, Demetrios Papathanasiou, participated in events such as Corfo’s Green Hydrogen Summit, and the second ESMAP’s Hydrogen for development (H4D) Partners and Stakeholders Meeting.
“All H4D partners met in Chile and shared experiences about what is happening with hydrogen, what is working well, what are the pending challenges, and what could be relevant for Latin American countries and the United States.” Explained Papathanasiou.
—What is the objective of the World Bank in this matter?
If we want the world to reach net zero emissions by 2050, as agreed in the Paris Agreement, it is impossible to see this without incorporating clean hydrogen as an important part of the global energy mix. And that's especially relevant because of what people call hard-to-kill economic sectors. There are many areas of the economy for which there is no other option for how we can truly decarbonize them, unless we bring clean hydrogen into the mix.”
—What are the main challenges that currently exist for this industry?
“I think the biggest challenge is that hydrogen is not widely used in the transportation sector. And the other big challenge is that of the 100 million tons of hydrogen used in the world today, almost 98% is still based on fossil fuels.”
“We are far away, but the goal is that, at the end of the day, everything that runs on diesel today, for example heavy transport, heavy machinery, ships, everything that runs on diesel in principle can run on hydrogen. The problem is that hydrogen is a gas, so the idea of how to keep it compact and in narrow spaces is one of the main challenges, but the technology in this regard is developing and I think we see more and more efforts around the world.
—What opportunities do you see for Chile in the development of this industry?
“If we look at primary energy, around three-quarters of the energy Chile uses is fossil fuels, and most of that is imported. Now, the real opportunity for Chile and hydrogen, especially when moving to green hydrogen, is that Chile can use its own renewable resources such as solar, wind, even water to an extend to electrolyze water, produce hydrogen and, slowly, become energy independent by utilizing only Chilean resources.”
“So, this is a huge change and a boost for Chile's economy. And this type of thinking is also applicable in other countries. But I think the biggest opportunity I see, and part of the reason we wanted to collaborate with the Chilean government to try to achieve green hydrogen, is, first of all, because it fits very well with the global energy transition and with getting the world to achieve net zero energy, and the fact that Chile has very good resources in wind and solar energy, and is very dependent on imports.”
“The great opportunity we have in Chile is that as we move towards a clean energy system, increasingly all mining, metals, minerals and much of the processing and refining of metals and minerals that occur in Chile will be increasingly less carbon intensive. So, as the world tries to give value to products produced with less carbon intensity, I think this is an additional benefit and opportunity for Chile.”
—What are the main benefits of achieving energy independence?
“Becoming more independent, especially when you are moving the system from fossil fuels to clean energy, one of the main benefits that you begin to develop is the certainty about costs. Whereas one of the great challenges with gas or oil is that prices can fluctuate very significantly and, since economies cannot function without energy, everyone depends on it. If prices rise, everyone will be affected. Now, the difference with renewable energy is that an investment is made from the beginning, but then there is clarity about what the long-term costs will be. One benefit is that you have certainty or much more predictability about your energy cost. The other is that a lot of resources and financing right now are leaving the country to pay for fossil fuel imports, which would otherwise stay more and more within the country. So, I think the economic boost of developing a clean hydrogen economy for Chile over time is that it can be very significant.”
Demetrios Papathanasiou was visiting Chile to participate in activities such as ESMAP’s Hydrogen for Development (H4D) Partners and Stakeholders’ Second Meeting and in Corfo’s Green Hydrogen Summit.