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Monica_55905 Jul 16

LAEF 2021 - Hydrogen: Latin America’s Opportunity to Become a Supply Leader

LAEF 2021 - Hydrogen: Latin America’s Opportunity to Become a Supply Leader image
Summary of Boardroom 5 at the Latin America Energy Forum, which covered recent advances of Hydrogen in the energy sector in LATAM, and the opportunities it present towards greener electrification and decarbonisation. 
The International Energy Agency reports that clean hydrogen is currently enjoying unprecedented political and business momentum, with the number of policies and projects around the world expanding rapidly. Our Latin American Energy Forum boardroom: “Hydrogen: Latin America’ Opportunity to Become a Supply Leader” reinforced the Agency’s affirmation: “Now is the time to scale up technologies and bring down costs to allow hydrogen to become widely used.”

For Mariano Berkenwald, Latin America Programme Officer of the IEA, and moderator for the discussion, first we have to observe where are there opportunities to decarbonize, with what kind of energies, and, finally, what is lacking at the technology level.  

“When we look at LATAM, we see that in certain places as long as the price of gas can be kept low, there are opportunities for blue hydrogen through carbon capture.”
It is an area that many governments find interesting, but is there really a future for blue H2?

“The future is green, but the road is multicolored,” is the answer from Michelle Carvalho , Senior Energy Specialist, IADB - Inter-American Development Bank, “and there is a future for blue hydrogen, using existing gas resources.”

Initial scale and costs of capture might be more expensive, but the production of ammonia or hydrogen, which involves a process of separation of synthesis, has generally lower costs.

Mr. Berkenwald touched on the role of governments in defining a long-term vision for hydrogen. “Certification would certainly be the definitive regulation” he said, “so that these governments can launch themselves into producing hydrogen.”

On top of the role of government, Ms. Carvalho also brought up the importance of the role associations like the Inter-American Development Bank play in the matter. “The objective of associations like ours is to create a super dynamic system so that all actors from the public and private sector can interact. The demand is sometimes not enough, which makes the mining sector so important. It is not only establishing pilots, but also ensuring that regulation is there to support the development of the sector.”

Apart from mining, transportation was discussed, as another sector generating high demand, especially long-distance transport, something that is abundant in the region.

Other type of transportation, mentioned by Gustavo Cazal, Director of Alternative Energy, Ministry of Public Works and Communications of Paraguay (MOPC), was Paraguay’s barge fleet, the 3rd largest in the world and a major artery of the country’s import-export traffic. The barges currently run on fossil fuel, which makes it a priority for the Paraguay government to replace these fuels with natural gas, and in the long term to explore hydrogen as a substitute.

“Paraguay did a series of studies to determine the cost of hydrogen production, and our results indicate very competitive prices”, commented Mr. Cazal. 

Beatriz De La Vega, International Energy Consultant at Efikas LLC expressed that for Peru the concerns around SDG7s are focused on the interest for investment, regulation and incentives. “To establish this regulation there are mechanisms, there are decrees of law that can be implemented now.” Private sector needs incentives, to make sure that the majority of the capital is not spent on taxes, but goes towards carrying out the project itself.

“You also need to ensure the repayment of any loan. And, finally, ensure economic prospects” Ms. De la Vega added.