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VideoAugust 11, 2023

A Pathway to Decarbonization: Green Hydrogen in Chile | World Bank Expert Answers

Green hydrogen offers a solution to developing countries to accelerate their just energy transition and decarbonization of various sectors of the economy, such as mining and transport. Moreover, the adaptation of green hydrogen in the energy matrix has the potential to create new sources of income and new jobs.

Following these benefits, the World Bank has just approved financing to promote investment in this energy in Chile. This is the organization's first loan to promote green hydrogen supporting climate change mitigation efforts.

To learn more about Chile's investments in green hydrogen and the promise behind this energy, we are delighted to be joined in this new episode of Expert Answers by Marcela Silva, who is the Regional Director of Infrastructure in the Latin America Region and the Caribbean at the World Bank. Watch now!


00:00 Welcome! Introducing the topic and the expert
00:50 What is green hydrogen?
01:55 The World Bank is financing it's first green hydrogen project in Chile
03:53 Industries adapting to green hydrogen
05:07 Chile as the ideal starting ground
06:00 Wind and solar power
06:45 How green hydrogen is different from other forms of hydrogen
08:12 Challenges in terms of production, transport and use
10:50 Boosting shared prosperity for a more livable planet
12:02 Thanks Marcela Silva for sharing your expertise!

A Pathway to Decarbonization: Green Hydrogen in Chile | World Bank Expert Answers


[00:00] WB Expert: - Green hydrogen has the ample possibilities to help the developing nations to accelerate their just energy transition, to accelerate the decarbonization of other sectors of the economy to create new sources of income, to create new jobs.

Host: - Hello everyone, and welcome back to Expert Answers. I'm Srimathi Sridhar. Today's episode is all about green hydrogen because the World Bank has just approved financing to promote investment in this energy in Chile. This is the organization's first loan to promote green hydrogen supporting climate change mitigation efforts. Before we sink our teeth deep into the specifics of what this all means, let's take a quick trip back to high school chemistry class.

[00:50] Host: - Hydrogen is the simplest element on the periodic table, with just a single proton and a single neutron. The scientists credited with discovering it labeled it as flammable air an indication of its value as an energy source. Just a few years later the term hydrogen was coined, meaning water former in Greek. Though hydrogen isn't an abundance on planet earth, water of course is. Hydrogen as an electricity source can be made by splitting water into hydrogen and oxygen using an electrolyzer. When this process is powered by energy from renewable sources like wind farms and solar, it can be produced without the use of carbon found in fossil fuels, which is why the energy as a result of this process is called green hydrogen. This means we have an energy source that provides a pathway to decarbonization.

[01:55] Host: - So to learn more about Chile's investments in green hydrogen, delighted to now be joined by Marcela Silva, who is the regional director for Infrastructure in the Latin America and the Caribbean. Marcela, thanks so much for being here on "Expert Answers." So I'd mentioned earlier that the World Bank is financing it's first green hydrogen project in Chile. Tell me more about this project. How will the financing be used and who will benefit from this?

WB Expert: - Excellent, so we are indeed very excited about this first operation for green hydrogen in the bank and being for Chile, because green hydrogen has the ample possibilities to help countries like Chile and other developing nations to accelerate their just energy transition, to accelerate the decarbonization of other sectors of the economy, to create new sources of income, to create new jobs. So all of this makes it super exciting. This loan will help the government to mobilize financial resources from the private sector and other sources to accelerate green hydrogen production and these will also help the country in reducing their exposure and their dependence on, for example, oil and their prices and the disruptions on the supply chains. In a nutshell, the project will support the creation of green hydrogen facility and it will also very importantly provide technical assistance to build the capacity and the skills that are needed in the country to really foster this new technology. It will create opportunities for the development of new skills and for new jobs. It will support or benefit the local industries that use this green hydrogen to decarbonize themselves and with these create green value chains that in the future will help them to remain competitive in a, let's say in a decarbonizing world.

[03:53] Host: - And realistically, you know, do you see other industries adapting into this sector? And if so, what would those industries be?

WB Expert: - Listen, there are already some examples. The practical uses at a smaller scale in the refinery industry, in the transport sector, in the shipping sector, green hydrogen is very versatile and has some specific advantages compared to, let's say renewable energies. It can be used to decarbonize sectors that are not easy to electrify. So for instance, green hydrogen can be used as a heating source in the industry sector. It can be used to produce metallurgical products. It can be used in the mining and extractive industry, which is so relevant for Chile, production of ammonia fertilizers. So it has multiple, multiple, multiple benefits and this is what makes it so exciting, so Chile has the potential to take a leadership position on this, but there is some additional work that needs to be done to a scale up. The important thing is to have more and more of these projects being financed to be able to reach commercial scale.

[05:07] Host: - And why Chile? Why is Chile sort of the ideal starting ground for this project?

WB Expert: - In general, since Latin America is home for an abundant renewable energy resources, Chile in particular has very low cost renewable energy. It has the best solar power in the Antofagasta region of the world. A lot of potential to use the green hydrogen in their local mining industry. It has very good local infrastructure and of course very strong institutions and human capital. So it has all the conditions that are optimal for them to take a leading position and we of course are are thrilled to have been a partner of Chile since the beginning, helping them in the preparation of the, all the enabling environment.

[06:00] Host: - One second here, Marcela, tell me why we can't just use wind and solar power directly to provide energy.

WB Expert: - No, you can, you can provide, you can use wind and solar only exclusively as a source of energy, but the advantage of green hydrogen is that, can be transported and can be stored. So you know that renewable energy like solar and wind depends a lot on the environment and the conditions and so having the possibility of using or complementing wind and solar with storage from green hydrogen, that is one of the big advantages.

[06:45] Host: - You know, I explained earlier in the episode what green hydrogen is, but can you tell me how green hydrogen is different from other forms of hydrogen that we've heard about?

WB Expert: - So hydrogen in itself is a zero emission fuel, and depending on the way that it is produced or extracted, it can create a huge amount of green gas house emissions. So currently 95% of the hydrogen that it is produced comes from fossil fuels and for that reason it's very contaminant. The process or methods that are most commonly used are either through using a natural gas and separating the hydrogen from the carbon dioxide and then releasing the carbon dioxide into the atmosphere or through the gasification of coal. The first one is what is called gray hydrogen and when it's produced from coal, it's what is called brown or black hydrogen. When, from those process, the carbon dioxide that is released is captured and either storage or repurposed for other purposes. That is what is called blue hydrogen and then other definitions, like the pink and the yellow hydrogen, which are again using electrolysis processes, but with sources of energy like nuclear.

[08:12] Host: - Who knew there are so many different forms of hydrogen, right? I'm learning so much from you here today, Marcella. So what are the challenges that you see with green hydrogen in terms of production, transport and also use?

WB Expert: - Green Hydrogen is a new technology. So it's in a very, in it's very nascent stages. It's being produced at a small scale and the process of producing green hydrogen is a bit, it's expensive and requires a lot of energy. So that on the one hand. If you look at this from the point of view of the private sector, it has attached a lot of risks and uncertainties and that's, some of the things that why the private sector needs a little bit of support to come and invest in this industry, so for example, the upfront costs of the electrolyzers, it's extremely high. On the other hand is, and as I said, a new market, So there is a lot of uncertainty about the future demand that this can create and so on and so forth, but the potential is there and that is precisely why this project is so important, because it was designed so as to help attract this private investment that is needed by providing good access to financing and risk mitigation measures so that the private sector, the potential investors get the confidence on this new technology and invest in it and we from the World Bank are very well positioned and very ready to support any other country that is thinking about developing this industry. We can engage upfront with technical assistance and or with a project like this one in Chile. That's on the, kind of on the production side and then of course post-production, you have challenges related to the fact that the infrastructure that is needed to transport and to use this hydrogen is some cases not existent or is not adequate. Hydrogen in general is a very flammable gas and it requires special methods for transportation, for usage and so on. So that can also add to the cost of using green hydrogen as a fuel, but all in all, it's a super important and potential source of energy for the carbonization. This is why we are working with countries like Chile and others in helping them address these barriers and these challenges.

[10:50] Host: This has been a fascinating conversation so far, Marcela but before I let you go, I do wanna end this on a bit of a, of a personal note for you. Looking at this project and what we've discussed here today, what inspires you? What excites you, you know, when you think about how this is gonna boost shared prosperity for a more livable planet?

WB Expert: - Well, I think that what really excites me about this, this project is thinking about the opportunities that this will create to very low income and vulnerable populations in some of the regions in our continent and how this can contribute to change the livelihoods of local communities in many areas of the country, like what we are doing with the Antofagasta region or Magallanes region in Chile. I really look forward and hope to see something similar being done in a country like mine, in Colombia. So I think that with this we are sort of scratching the surface and there are many opportunities for the region and for the world to succeed. This project is sort of a blueprint for others that are interested to follow and we as I said, we are ready to support those that are interested.

[12:02] Host: - Well, congrats again on the work so far. Thank you so much for joining me on "Expert Answers" to talk more about green Hydrogen.

WB Expert: - Thank you so much Sri.

Host: - Thanks Marcela.

WB Expert: - Thank you very much.

Host: - So there you have it. Green Hydrogen offers a solution to decarbonize industries mining and transportation. This isn't just hot air. Thanks again to Marcela Silva, the regional director for Infrastructure in the Latin America and the Caribbean for those really valuable insights. That's it for today's "Expert Answers." I'm Srimathi Sridhar. Thanks for joining us and see you again soon.

How green hydrogen can help a clean energy transition?



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