Written by Ian Cardenas, Paralegal
Green hydrogen represents a unique opportunity for Chile on its path towards sustainability and development. Taking advantage of the region’s natural resources and renewable energy generation capacity give the opportunity to make the country a national and international leader in its production. However, challenges associated with infrastructure and cooperation need to be addressed to ensure success towards a cleaner and more resilient energy future.
These challenges could be addressed by creating a participatory strategic pathway through technical and inter-institutional roundtables, citizen workshops, advisory councils and public consultations in order to address the climate crisis we face as humanity in a planned and collaborative manner.
In this scenario, Chile can be considered as privileged and at a clear competitive advantage over other actors. This is evident, for example, in the north of Chile where the highest solar radiation on the planet is found; in the central area, electricity generation by solar radiation is much better than electricity generation by fossil fuels; and the winds in the far south, as well as in certain areas of the Bío Bío region, blow with the same energy on land and at sea.
Development news in Chile
On 14 June, President Gabriel Boric and European Commission President Ursula von der Leyen announced a European fund of almost 225 million euros (US$243 million) for the country to promote the development of the green hydrogen industry and, at the same time, meet European demand for imports of this renewable energy.
The World Bank has also placed its bets on Chile: it will boost the green hydrogen industry with a $150 million loan, calling the country a “leader” in clean energy generation. The organization sees Chile as “a model to follow” for other developing Latin American economies.
“Chile has exceptional qualities for the development of a competitive green hydrogen industry,” said the World Bank’s vice president for Latin America and the Caribbean, Carlos Felipe Jaramillo, in a statement.
The loan, to be implemented by Corporación de Fomento de la Producción (Corfo), seeks to mitigate the investment risk in green hydrogen projects, a way of generating energy from renewable sources that could play a key role in the energy transition.
To do so, the agency will incentivise early investments in green hydrogen production and encourage its transition to commercial scale.
New projects and opportunities for Chile
Firstly, in the coming weeks, two new initiatives will be added to the portfolio of green hydrogen projects in Chile. These are projects promoted by subsidiaries of European companies, whose future is linked to the awarding of fiscal land under a government programme.
Nordex Energy Chile and EDF Renewables Chile presented initiatives in the framework of the National Plan for the Promotion of Green Hydrogen Production on Fiscal Land, called Window to the Future, of the ministries of National Assets and Energy, which was announced as part of the green hydrogen strategy at the end of November 2021 – in the second government of Sebastián Piñera – and which received applications for the allocation of fiscal land between 3 and 14 January 2022..
This programme established a single window of time for individuals interested in the development of the industry in Chile to submit applications for the direct allocation of concessions for onerous use of public land.
The new land allocations in Chile include three concessions, but involve two different projects. These will be developed by Nordex in the commune of primavera, Magallanes region, and by EDF in Tocopilla, Antofagasta region, on a 400 hectare site.