Green hydrogen, a strategic option or just a dream?

Marcos Lima, Director and Associate Professor PUC

Since the launch of the National Green Hydrogen Strategy, we have seen great interest in Chile’s possibilities in the development of this new industry, with the associated projects being said to promote the creation of 22,000 new jobs by 2030, 87,000 by 2040 and 94,000 by 2050.  with more than 800 companies participating in the cluster that would be formed around it, being equivalent in exports to copper mining by 2050. It is positive that the country dreams of joining the great crusade of the 21st century, curbing climate change, being a relevant player in the energy transformation linked to green hydrogen and thus cooperating with a zero-emission planet.

For this gas to be used on a massive scale, new technologies must still be developed, both in its production and storage and in multiple applications related to its use in domestic consumption, industry and transport, to make its commercial application viable, since all this is still work in progress. Chile can take a leap in its ability to promote technological ventures in this field, even though what has happened in the past does not make us very optimistic. We must not forget that, as our country is the main global player in copper mining and very relevant in the forestry and salmon farming industry, it has not been able to develop competitive global technology companies, and this can be an opportunity to vindicate itself.

In fact, the country’s figures in relation to investment in R+D+i are very poor, not exceeding 0.4% of GDP, the lowest among OECD countries[1], and the number of dedicated researchers is also low (1.11 vs 8.29 OECD average), although it is fair to recognize that quality research is produced[2]. Without an adequate environment of cooperation and trust between private capital, businessmen and entrepreneurs, academia and research centres’, nothing will be possible. In this regard, the State must serve as a catalyst for this associative process, which is essential to achieve development.

A second wake-up call concerns the curse of distance. We are one of the most “isolated” countries in the world and our neighbours are not exactly an example of stability and economic growth. If you put Chile at the center of the planet, you will see in half the globe, Latin America, Antarctica and the rest, an immense blue ocean. He will not even see Africa or Australia, although Miami will appear; in our half less than 10% of the world’s GDP is generated and on the other side 90%. This is essential when, for export purposes, the costs of transportation and distribution of hydrogen or fuels and other compounds derived from it can neutralize the country’s intended advantage of having energy from very cheap and competitive renewable sources. It is difficult to think of competing with solar PV-based green H2 plants that can be installed in North Africa, or wind farms in Northern Europe, which can “inject” H2 into existing distribution systems and save the costs and complications of long-distance transport that our exports must travel.

And the third alert is related to the fact that this race for technology and markets for H2 is a fight of “big dogs”. Between the United States, Germany, China on the one hand, and the countries of Africa, Oceania, and the Middle East on the other, there is not much room left to make progress. They are closer to the markets, where the way in which this fuel is going to be used will be defined, thousands of researchers and technological clusters tested together with a tradition to generate almost immediate commercial applications, and in the case of OPEC countries, billions of dollars to invest in a “competition” that can leave them with their oil under the desert. 

[1] OECD. Stats, April 2019

[2] SCImago Journal & Country Rank (2014).