Hydrogen, Renewable Energy and Surpluses
In 2000, the printed media concurred with various energy seminars about consolidating renewable energy. Back then, there were great debates about the future of oil, and experts held climate summits and spoke about the Chernobyl incident, which was still fresh in everyone’s mind. Twenty years have passed and renewable energies such as wind and solar have been consolidated.
When talking about hydrogen today, our position may be the same as toward renewable energies 20 years ago. While some are skeptical, there are also many technicians and entrepreneurs who talk about and advocate for this technology, which will surely be consolidated over the next 15 or 20 years or perhaps sooner, considering that technology is advancing at a breakneck pace.
Many will wonder: Why hydrogen? The first answer is rather technical: “Because it is a clean fuel that produces more energy per kilo than any other.” Also, although not as readily available in its natural state as oil or coal, hydrogen can be obtained through chemical processes, the main input of which being water, which can be transformed through electrolysis. Even though the element is currently obtained from hydrocarbons—especially natural gas—solar energy is also used.
In this regard, specialists on the subject are developing a color classification that assigns values depending on the method used to obtain hydrogen. The following illustrates such examples:
- Green hydrogen is produced by water electrolysis using renewable energies. Its name is associated with zero emissions
- Grey hydrogen, currently the most produced. CO2-emitting processes using fossil fuels are involved
- Blue hydrogen is the same as above, but the CO2 is captured in the exact same amount as by natural gas thermal power or combined cycle plants.
- Purple hydrogen is obtained using electricity produced by nuclear power plants, which, despite being clean energy, poses environmental risks
- Brown or black hydrogen is produced with coal-generated electricity.
On the application side in the energy sector, the use is diverse, as green and blue hydrogen are gaining a stronger global foothold as a key technology aiding to hit the CO2 emission targets, particularly in energy-efficient sectors such as an array of industries (refining, chemicals, fertilizers, methanol, steel, mining, cement, etc.) and heavy transport (trucks and long-distance passenger buses, trains, ships and possibly aircraft).
This versatility and scope has created incentives that surpassed even the constraints imposed by COVID-19, with significant progress being made in several countries across Europe and Asia. Germany, for instance, announced a few months ago investments amounting to nine billion euros focused on green hydrogen, while France announced an investment of seven billion euros for the next 10 years in September focused on these technologies, with two billion euros to be allotted over the next 12 months. The European Commission announced that green and blue hydrogen will be the two pillars of its new post-COVID green growth strategy (“Green Deal”) . The body also said that it expects the European hydrogen market to move from 2 billion euros in 2020 to as much as 140 billion euros by 2030. Similarly Japan, South Korea and China have been investing heavily on this new fast-growing sector.
In Latin America, several countries have understood the enormous potential of green hydrogen, not only as a technology to help drop carbon emissions, but also as an opportunity to monetize the massive surpluses of intermittent electricity production that will support the rapid growth of the renewable king, using hydrogen as an energy vector of clean energy exports. Following the example of their peers in Europe, California, Japan, South Korea and China, the region’s governments are beginning to explore the potential of this energy, having identified the need to build a national hydrogen strategy as one of the first steps for technology development at country level.
Chile has been positioning itself as a regional leader, and will be the first country to have a National Strategy, which should be announced by the end of 2020. Costa Rica, with strong support from the private sector and the Inter-American Development Bank, is taking steps in this direction, including a road map for green hydrogen in the transport sector. Mexico is also actively working on the issue, quantifying market potentials and exploring priority projects. In Colombia, a tender is being prepared for a study to define a National Strategy. Uruguay is also interested in developing such technologies, with the country working toward becoming an exporter of renewable energy in the form of green hydrogen over the next decade, as its renewable potential far exceeds its domestic demand, generating significant electricity surpluses and taking advantage of the low costs of electric power used to produce hydrogen.
In all cases across the region, the challenge will be to study whether or not prices are now competitive, as well as to quickly undertake the development of regulations, incentives, financial mechanisms and technological adoption that enable their subsequent implementation.
