The energy transition in Chile has experienced very significant progress
July 26, 2022
Chile’s Energy Transition: Challenges, Opportunities, and the Role of Green Hydrogen
The global energy transition is driving industries worldwide, including Chile, toward cleaner combustion processes, with an increasing focus on natural gas and green hydrogen. However, this transformation raises technological, modeling, and regulatory challenges in public policy, energy markets, and sector regulations.
“The war between Russia and Ukraine has disrupted energy markets, driving oil and gas prices to their highest levels in nearly a decade. This situation has forced many countries to reconsider their energy supplies. Sustained high energy prices could accelerate investments in carbon capture, LNG, hydrogen, and renewable energy projects,” says Shahriyar Nasirov, director of the Master’s Program in Renewable Energy Technologies and Management at the Faculty of Engineering and Sciences, Universidad Adolfo Ibáñez (UAI).
Additionally, he notes that this energy crisis may lead to increased investments in energy efficiency, an area with great potential but less attention compared to renewables in Europe.
“The war in Ukraine may accelerate Europe’s shift away from fossil fuels, but it could also delay the transition to clean energy and increase global greenhouse gas emissions,” he warns.
Tailored Solutions for Chile
While the challenges of the energy transition are global, Chile’s geographic, social, and institutional conditions—along with its vast renewable energy potential—require customized solutions.
This is where the Centro de Transición Energética (CENTRA-UAI) comes into play. CENTRA is a research and innovation hub focused on bridging the gap between scientific advancements and practical solutions for the energy transition. It collaborates closely with the local energy industry and public sector to:
- Develop clean fuel value chains
- Advance Industry 4.0 with energy innovation
- Promote smart and sustainable communities
- Integrate renewable energy into national grids
Chile’s Progress in Energy Transition
According to Nasirov, Chile has made significant advancements in the short term. Unlike many other nations, Chile enjoys a broad consensus between the public and private sectors that this transition benefits all economic players.
“Beyond contributing to climate change mitigation, this transition creates new business opportunities and revenue streams. Thanks to exceptional natural resources and successful public policies, Chile has become one of the largest renewable energy investment markets in South America.”
Notably, in 2020, foreign direct investment (FDI) in renewable energy accounted for nearly half of all foreign investments in Chile. The expansion of solar and wind energy has progressed faster than expected, reaching nearly 30% of the country’s energy mix in 2021.
Chile’s Commitment to Carbon Neutrality
Chile has set a carbon neutrality target for 2050, and in 2020, it became the first emerging market to pass a carbon neutrality law.
“Despite the progress made, I remain very optimistic about what’s coming next. There is enormous potential in green hydrogen projects, seawater desalination, and more,” says Nasirov.
The “Dark Side” of Energy Transition?
Some critics argue that the energy transition has environmental and social drawbacks, particularly regarding the extraction of minerals necessary for renewable technologies.
For example, wind power requires nine times more minerals than natural gas power generation.
However, Nasirov disagrees with this criticism, calling it short-sighted:
“Renewable energy technologies do not generate emissions during operation, but their life cycle—from raw material extraction to decommissioning—does have an impact.”
He explains that most emissions from wind power come from the extraction of materials like steel, aluminum, and copper. The remaining emissions come from:
- Transport
- Installation
- Operation and maintenance (O&M)
- Decommissioning
“In the short term, building large-scale renewable infrastructure requires massive energy consumption, and fossil fuels are still the dominant source. However, as the electricity grid decarbonizes and electric vehicles become widespread, emissions will drop significantly.”
Additionally, he notes that recycling and reusing wind turbine components in the near future will help balance the demand for raw materials in the global market.
Source: Diario Financiero