The energy transition is in search of minerals such as lithium, uranium, copper, and others that are particularly abundant in Latin America and the Caribbean. This highlights a strong return to mining…
ISSUE 119 | 2023
ENERGÍABolivia
According to ECLAC, in order to promote renewable energies in Latin America and the Caribbean, it would be necessary to drive the development of the new green hydrogen industry just as it has been established that in the region and until 2021, 95% of the global supply of non-green hydrogen was produced from fossil fuels such as gas.
It clarifies that in Latin America and the Caribbean, 5% of the world’s gray hydrogen is produced (from natural gas reformed by steam), which is used as raw material in the production of ammonia, methanol, steel, and refineries.
It emphasizes that, compared to this option, there is green hydrogen produced with renewable energies such as solar, wind, and hydroelectric power, which are available in large quantities in the region and at very competitive costs. It ensures that it is an extremely flexible and suitable energy source for use in high-intensity energy sectors such as heavy industry (cement and steel) and transportation (freight, shipping, and aviation).
HYDROGEN AS AN ENERGY STORAGE
The document titled “Latin America and the Caribbean halfway Towards 2030” states that the air transport, road transport, and automobile sectors, as well as some industries, which represent more than 2/3 of final energy consumption, are highly dependent on fossil fuels, with their resulting greenhouse gas emissions and air pollutants.
“Therefore, using green hydrogen as a storage for solar and wind renewable energies, or as an energy source, contributes to the decarbonization of the electricity grid, transportation, and industries,” says the document.
In the region, the green hydrogen industry is in development based on electrolyzers that use solar and wind energy, although it is not yet produced on a commercial scale. By 2022, there were 12 green hydrogen projects in operation in Argentina, Brazil, Chile, Colombia, Costa Rica, and Peru.
Green hydrogen is used, on a small scale, in transportation (buses, trucks, and shipping), electricity generation, and mining (as a replacement for diesel). Additionally, there are 71 projects under development in the aforementioned countries, as well as other countries and territories such as Bolivia, French Guiana, Mexico, Paraguay, and Uruguay. The countries, with a prominent role such as Chile, are developing their green hydrogen industry and collectively have the potential to produce 160 million tons annually.
“Critical minerals are fundamentally characterized by their scarcity in supply and, in this line, their consequent impact on the economy is much greater…”
HYDROGEN AND DEVELOPMENT?
Green hydrogen is an increasingly relevant topic on the energy agenda of Latin America and the Caribbean, in line with the increasingly ambitious goals related to development, energy transition, and climate. Many countries in the region have strategies or roadmaps for the development of green hydrogen or are in the process of creating them.
Green hydrogen represents a highly important innovation industry for the energy transition in the region, which has a significant supply of renewable energies, technological capacity, and engineering expertise to develop and capture added value throughout the value chain. It has the potential to decarbonize, drive the energy transition, and simultaneously reactivate economies. It is time for the region to participate in the discussion and establishment of certification mechanisms for this product in order to harmonize the definition of green, sustainable, and low-emission hydrogen within the new industry, both globally and regionally.
CRITICAL MINERALS TO INCREASE RENEWABLE ENERGIES IN THE REGION
In this context, it states that to advance towards a greater participation of renewable energies in the energy matrix, the development of production, storage, and transmission infrastructure, as well as the electrification of transportation, are required.
“The main clean and renewable energy production technologies are more intensive in minerals called ‘critical’ for the energy transition, as well as for electromobility,” it emphasizes, and specifies that the minerals considered critical vary in each country or institution analyzing the subject.
Critical minerals are fundamentally characterized by their scarcity in supply, and consequently, their impact on the economy is much greater than for any other raw material, according to Segemar of Argentina, distinguishing uranium, copper, cobalt, manganese, chromite, rare earths, germanium, bauxite, lithium, and the platinum group among them.
ECLAC adds that in many countries in the region, minerals that are treated as critical for the energy transition are called “strategic” due to their relevance and weight in national development.
It assures that the energy transition will rapidly increase the demand for these minerals, which are particularly abundant in Latin America and the Caribbean. It highlights that the region holds 51% of the world’s lithium reserves, 38% of copper reserves, 22% of natural graphite, 39% of silver, and 17% of nickel, zinc, and so-called rare earths.
The region also generates 40.6% of global copper production and 32.2% of lithium production, with Chile (26.7%) and Peru (10.5%) standing out as the first and second world producers, respectively, in the case of copper. Regarding lithium, Chile is the second-largest producer (24.8%), followed by Argentina (5.9%), without mentioning the percentages around Bolivia.
THE COVETED LITHIUM
According to this document from ECLAC, in the sustainable development scenario to achieve the goals of the Paris Agreement, global demand for lithium could grow up to 42 times by 2040, using 2020 as the base year. The demand for graphite could grow 25 times, cobalt 21 times, nickel 19 times, and copper 2.7 times (IEA, 2021). It also projects that the expansion of electric capacity in Latin America by 2032, guided by renewable sources and in a scenario of regional integration, will require 47 GW of photovoltaic solar generation and 75 GW of wind generation.
“To achieve this capacity, between generation and transmission facilities, a demand of 611,000 tons of copper, 53,300 tons of nickel, 2,500 tons of cobalt, and 2,100 tons of lithium is projected,” it indicates. It adds that these projections refer to the connected renewable energy scenario, which is more optimistic, with high intraregional transmission integration and a high proportion of renewable energies, allowing for an 80% share of renewable energy by 2032.
