Less than a decade ago energy companies scoffed at Chile’s drive to develop its renewables sector, rejecting it as too expensive even though the Andean country boasts some of the world’s best sunlight. Since then, a green technology revolution has pushed the cost of producing solar power down 80 percent, and renewables now make up 44 percent of the mix in a nation no longer dependent on imported energy. Chile is now hoping this will allow it to achieve a similar feat with green hydrogen, a clean alternative to fossil fuels that – unlike solar and wind energy – can be used at any time of day or night and in any weather conditions. Green hydrogen is made using electricity from renewable energy to electrolyze water, separating the hydrogen and oxygen atoms. As a fuel, hydrogen produces no emissions and can be used in fuel cells or internal combustion engines in cars, buses, ships and even spacecraft.
“Chile could be exporting $3obn of green hydrogen by 2050,” said Juan Carlos Jobet, the country’s energy minister. “That’s how much copper we export today.” Copper is the current linchpin of the mining nation’s economy, accounting for about half its exports, with huge demand from China. Mr Jobet said green hydrogen had the potential to be “transformational”for Chile’s economy, with a huge impact on job creation and local economic development, emphasizing the need to diversify his nation’s economy and reduce carbon emissions in its mining sector to comply with the Paris climate goals.
‘The question is who pays for the investment, who pays for the energy transition … we have to solve that and it is not easy Hans Kulenkampff, president of H2Chile
McKinsey calculates that global investment in green hydrogen – both the electrolysers required to produce it and the renewable power plants to run the electrolyzers – should reach roughly $5oobn by 2030 and $2.5tn by 2050.
“These are very, very big numbers, and Chile has to find a way of capturing a part of that investment,” Mr Jobet said. “But even if it was half that, it would be gigantic.” For this to happen, advances will be required in countries developing the technology such as the US, Germany, Japan, and the UK to bring the cost of production to economic levels.