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Green hydrogen is hydrogen generated by renewable energy or from low-carbon power. Today, its production is key to governments who are looking for transitioning to renewable energies. In November 2020, Chile's president at the time presented the "National Strategy for Green Hydrogen," stating he wanted Chile to become "the most efficient producer in the world by 2030".
The desert in the North of the country holds the highest solar irradiance on the planet, and the weather at the Patagonia in the South produces strong and consistent winds. This is why Chile has a renewable energy potential to install 70 times the electricity generation capacity they have today. This abundant renewable energy could help the country to become the cheapest producer of green hydrogen on Earth, offering various opportunities to invest.
An opportunity for Chile
Given the climate crisis, Chile is ready to assume a leading role in the global energy and economic transition, with its solar and wind power sectors quickly growing and maturing. In the past 6 years the country has increased its generation capacity considerably and by 2030, 70% of the power grid is expected to be renewable. Some key factors put Chile in a leading position:
The most powerful solar radiation on the planet is found in Chile’s North: capacity factors of 35% can be achieved in monofacial solar photovoltaic plants with 1-axis tracking.
Solar generation in the central part of Chile is already more competitive than fossil-powered electricity generation: this renewable potential is located close to large consumption centers, gas grids, and logistical hubs, such as ports and distribution centers.
Winds in the far South end of the country blow with the same power on land as off-shore: 120-meter-high wind turbines are able to achieve capacity factors of over 60% onshore, equivalent to off-shore performance in other countries.
The quality and abundance of the renewable resources found in these regions can enable a large-scale competitive production. Even more, the competitiveness of Chile in renewable energy production and the global need for clean energy carriers could open the door to the creation of an economic sector that could rival the size of the Chilean mining industry.
Future prospects
By 2025 Chile is expected to become a top destination for green hydrogen investment in Latin America. That’s why the new government of President Gabriel Boric recently created a Strategic Committee for the Green Hydrogen Action Plan and measures to promote the development of this industry. With a transversal presence of different political sectors, the members of this group will have the mission of paving the way for the deployment of the H2V industry.
These new initiatives seek to accelerate the implementation of the Action Plan through new sources of financing for projects and support for regional governments, among others. The committee includes former president Michelle Bachelet, and former Minister of Energy and Mining, Juan Carlos Jobet, among other important actors.
Local events hyping the green transition
This year we participated in Hyvolution 2023, the number one hydrogen event in Europe for the energy, industry and mobility sector. The event arrived for the first time in Chile with the objective of bringing together in one place the local ecosystem with national and international actors for the promotion of green energies, and the exhibition of technologies, products and services of the sector. With the latest government declarations, it is expected that these kinds of events and instances grew as time passes.
For example, during Hyvolution, BusinessHub facilitated meetings for the Canadian company Current H2, and we also guided them through market information and recommendations on better exploring and entering the market, and approaching local companies. Over 10 B2B meetings were organized between Current H2 and the biggest mines in Chile such as Codelco, Antofagasta Minerals and BHP.
BusinessHub also arranged a Trade Mission for The Embassy of Canada in Chile. The project consisted on the identification of key players in the clean technologies industry, such as customers, providers, and distributors from Chile. We contacted and invited local companies from different industries, such as mining, energy, retail and technology to participate in the Trade Mission that took place in Santiago. 24 companies traveled from Canada with their representatives to meet with the local companies, and more than 200 meetings were arranged with successful results for most of the participants.
Conclusions
Transition to renewable energies is no longer an option. Governments all over the world are looking for new opportunities that enable them to move from fossil energy to green energy, and in that regard Chile has a lot to offer. As a trusted consulting firm in Santiago, Chile, we are committed to helping businesses navigate the complexities of energy transition. We can help you to embrace the change and pave the way for a prosperous future. Get in touch if you need more information of this industry.
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