Hydrogen Virtual Delegation Tour

Hydrogen experts from Denmark, Chile and California joined forces for a virtual delegation in March. Vestas, Topsoe, Ørsted, European Energy, EMD International and Green Hydrogen Systems participated to gain knowledge on the regional hydrogen markets. They represent a diverse collection of Danish companies from across the Power-to-X value chain: project development, electrolysis, e-fuels production and software.

Vestas, Topsoe, Ørsted, European Energy, EMD International and Green Hydrogen Systems joined the virtual delegation tour focusing on hydrogen in California and Chile.

The consultancies Brinckmann and Hinicio introduced the representatives to the two markets, before they met with stakeholders from Chile and California. Each session gave the companies a chance to hear about identified opportunities and challenges from the local companies’ point of view, and the opportunity to pitch their company and solution to Californian and Chilean project developers.

While California and Chile are far away from the home markets in Denmark and Europe, the Danish companies and The Trade Council acknowledge the great potential that both these markets offer.

Hydrogen in California

California is expected to be a key hydrogen market, though it has yet to see large-scale project development. The sunshine state houses vast resources for renewables and existing hydrogen fuelling infrastructure. Politically there is also impressive push for policy on further decarbonisation of the mobility sector. For example, through low or no carbon hydrogen.

We chose to focus on California for this delegation for several reasons. Not only do we see great potential for green hydrogen here, due to its exposure to renewables and heavy industry. We also see a greater resemblance between this market and Chile in how its supported by progressive policies. As opposed to other U.S. markets who also have great hydrogen potential

says Head of Energy Transition and Senior Commercial Adviser at The Trade Council Manja Meister.

In the sessions focusing on California, the group met with two very different types of players, both very likely to have big impact on the development of a green hydrogen economy: AES, one of the largest developers and renewable power asset owners in the U.S., and Chevron, one of the largest integrated oil and gas companies.

These two types of companies are great examples of the different capabilities needed to push for development and offtake of green hydrogen, not just in California but around the world.

AES is a native within renewables, for whom green hydrogen presents a solution to an existing problem regarding volatile power output and curtailment. For Chevron, hydrogen is an existing part of its operations and switching to renewables-based hydrogen offers a path to decarbonisation.

Policy impact and market acceptance of a ‘green premium’ as well as use of existing infrastructure such as fuelling stations, refineries and ports were discussed in the California sessions.

the Chilean Market

Chile is one of the world’s leading regions in terms of renewable energy potential. The country has a privileged geographical position, with one of the highest levels of solar irradiation worldwide and formidable wind speeds. There is also great political support with ambitious initiatives, such as the Green Hydrogen Strategy presented in late 2020.

Based on very low renewable electricity prices, the production costs of green hydrogen are among the lowest worldwide. Which is why a large number of national and foreign project developers such as CIP, Total-Eren, AES Andes, Mainstream/Aker and Enel Green Power are looking towards Chile. An ambitious pipeline of more than 60 projects underlines this.

There is huge traction on the development of PtX projects in Chile and with many projects in the design phase it’s a very good moment for technology providers to present their solutions. There is also need for new port infrastructure and desalination plants, so in total the targeted investment will be among the largest in a single sector in Chile. A challenge might be a general lack of subsidy schemes, however, the projected levelized cost of hydrogen is as low as 1,05 USD/kg H2 in 2030

says the Head of the Trade Department at the Danish Embassy in Santiago, Maria Mesonero Kromand.

The Danish companies met virtually with ENEL Green Power Total-Eren, and AES Andes, which have large scale hydrogen and ammonia projects in the pipeline both in Northern and Southern Chile. The conversations were very specific and included discussion on timelines, targeted applications and use-cases, the advantages and disadvantages of grid-connection versus island mode, home market versus export opportunities and much more.

takeaways and tendencies across regional markets

Several topics were mentioned repeatedly regarding the hydrogen market in both California and Chile: CO2 access and utilization, certification, supply chain issues and industrial and hydrogen clusters. This indicates what the biggest challenges and opportunities are for developers right now.

Hydrogen Denmark were part of the delegation tour and pleased with the representation of Danish strongholds on the hydrogen value chain.

The company pitches were highly relevant and were delivered with great enthusiasm and professionalism, which was well received by both American and Chilean PtX-project developers. After the presentations from the local PtX-developers and the pitches by the Danish companies, the involved partners were not at a loss for words and lively Q&A sessions emerged, signaling the mutual interest of the parties in each other’s projects and competencies

Says Eleonore Fenne from Hydrogen Denmark

After the meetings, the Trade Council facilitated bilateral meetings between the companies and will continue to assist the knowledge-sharing across the Atlantic