“To ramp up green hydrogen, a focus on strategic sectors as early adopters at large-scale is required.”

Interview with Max Correa Achurra, Head of the Fuels and New Energy Division at the Chilean Ministry of Energy

In the following conversation, Max is providing detail on the green hydrogen developments in Chile as well as similarities and complementarities between Chile and Germany.

Renewable Energy Hamburg: In the end of last year, Chile published its 'National Green Hydrogen Strategy' and set ambitious targets for the price of green hydrogen, hydrogen exports and electrolysis capacities. What are the main objectives?

Max Correa: This strategic policy sets ambitious global targets for the country. Until 2025, we aim to have 5&60;GW of electrolysis capacity under development by 2025. By 2030, we target to have the lowest green hydrogen production costs with 1.5 US-Dollar per kg. And by 2040, we want to become one of the top 3 exporters of green hydrogen and its derivates.

Renewable Energy Hamburg: Extensive amounts of renewable energy are required for the production of green hydrogen. Chile is a country with a great renewable energy potential. What strategy does Chile follow regarding the development of renewable energies?

Max Correa: Chile offers the most powerful solar radiation on the planet and consistent onshore winds that rival offshore potentials in other geographies. The country has mapped 1.75 TW of untapped renewable electricity generation, which amounts 70 times the installed capacity. Chile enjoys a solid regulatory framework, with a liberalized power sector with a competitive, technologically agnostic, unsubsidized and economically dispatched market. These characteristics will allow Chile to achieve surplus production of renewable energy, which may be used for green hydrogen and other carriers.

In addition to the attractive investment and regulatory frameworks, public policy is focused on facilitating the introduction of new technologies into our grid (e.g., batteries, demand response) and sophisticated processes for transmission infrastructure expansion to manage the new renewable generation potential.

Renewable Energy Hamburg: In 2019 the German-Chilean Energy Partnership was established. With the Haru Oni project by Siemens Energy and Porsche we have seen a first international green hydrogen project. What role does Germany play for the development in Chile and what projects or cooperation do you see in the future?

Max Correa: The German and Chilean hydrogen strategies present relevant similarities. Both define green hydrogen as the most sustainable solution decarbonize certain sectors and applications, and both identify the need for international cooperation to accelerate the growth of this new clean energy carrier. In addition, the strategies show significant complementarities. Germany declares its need to import green hydrogen in the long term since the country’s domestic renewable resources will be insufficient to meet its demand. The Chilean case is the flipside: its local renewable generation potential is so vast, relative to its potential electricity consumption, that exporting green hydrogen is one of the few manners to utilize these resources. The Haru Oni project showcases precisely this complementarity, driven by innovative companies.

The Energy Partnership channels the cooperation of both Governments to accelerate and strengthen their clean energy policies and roadmaps. Green hydrogen has become a core topic and activities revolve around facilitating business creation between industry sectors from each country, experience exchanges on regulatory and technical topics, and strengthening capabilities in specialized teams.

Renewable Energy Hamburg: In Hamburg and Northern Germany green hydrogen is required to enable the decarbonization of the industry and the transportation sector. Where do you see use cases in the Chilean market?

Max Correa: To ramp up green hydrogen, a focus on strategic sectors and applications that can act as early adopters at large-scale is required. In our National Green Hydrogen Strategy, we aim to accelerate the deployment of green hydrogen in 6 prioritized applications where green hydrogen is close to market, where demand is relatively concentrated geographically, and that present a great willingness to transition to clean energy. These applications are (i) oil refinery feedstocks, (ii) green ammonia production to replace grey ammonia imports, (iii) mining haul trucks, (iv) heavy-duty on-road trucks, (v) long-range buses, (vi) and blending into gas grids. However, other logistics and transport applications such as forklifts, trains or maritime applications are being addressed as well, since they may present significant opportunities for early uptake of green hydrogen in specific regions or in niche companies.

Renewable Energy Hamburg: Chile is also planning to become a top export country for green hydrogen. What are the next steps to start an international export structure? Where do you see challenges?

Max Correa: To prepare exports we are deploying a green hydrogen diplomacy to position the country as a source of clean fuels and energy carriers. This year we have already signed an MoU with Singapore and the Port of Rotterdam, and preparation of other MoUs are underway, so that we can bilaterally explore the possibilities for international green hydrogen supply chains, and together endeavour to reduce its barriers. A notable challenge for export is infrastructure. A study commissioned by the Inter-American Development Bank to support our work in this regard is about to begin. It will analyze the prefeasibility of an export terminal located near our high-renewable potential regions, in order to gauge its costs, timeframes, and challenges of various kind which will have to be addressed.

A relevant challenge is achieving large-enough scale in the required timeframes: There is a general agreement that the key to clean hydrogen competitiveness has to do with scale, which today is constrained by several factors, such as the manufacturing capability of electrolyzers, and transport and storage infrastructure and technologies. If clean hydrogen is to deliver on its promises, these barriers have to be tackled in a decisive manner to achieve meaningful progress towards the Paris Agreement goals.

Renewable Energy Hamburg: Thank you very much for the interview!

Max Correa Achurra is currently the Head of the Fuels and New Energy Division at the Ministry of Energy, Chile. His Division is comprised of three Units: Hydrocarbons; Wood Fuels; and New Energy Carriers, the later responsibly of promoting the development of a green hydrogen industry in the country.