There’s a lot of talk about the decline of natural gas, and I must say I’m surprised that so many are surprised by its depletion. Natural gas was going to run out. What we must continue to do is propose alternatives within a reasonable timeframe so that they can be implemented and we can have a sustainable economy.
ISSUE 130 | 2024
Raúl Serrano
The incorporation of Green Hydrogen as a factor for decarbonization and the development of the Bolivian economy, replacing natural gas, was another key proposal at the Annual Energy Dinner (CAEE) 2024, led by Juan Pablo Calderón, Manager of H2 Bolivia S.A. and Manager of Strategy and Business Development at G&E.
He was categorical in stating, “There’s a lot of noise about the decline of natural gas, and I must say I’m surprised that so many are surprised by its depletion. Natural gas was going to run out. What we must continue to do is propose alternatives within a reasonable timeframe so that they can be implemented and we can have a sustainable economy.”
“We are structuring a proposal for the country where we can gradually replace natural gas. Will I succeed or not? We’ll see in a few years, but we can say that we have presented an alternative and that talents have not been left unused. That’s the idea. In short, it’s an efficient project,” he said before a full audience from the energy sector.
ENERGY SECURITY SOLUTION
Asked if hydrogen could be part of the solution for energy security in Bolivia, he replied that simulations had been conducted and a proposal called “Substitution of Natural Gas from 2032” was presented, later revised with a shorter horizon, indicating that with a viable hydrogen cost, substitution in many local natural gas consumption points became possible.
“For example, injecting 20% hydrogen gas directly into gas networks is already being done in many places. That means we can gradually reduce 20% of that consumption,” he emphasized, noting that most natural gas consumption occurs in thermodynamic processes. “And those heaters have Siemens turbines that are fabulous and already allow the consumption of natural gas mixed with hydrogen. Therefore, if we manage to, as a first step, supply those heaters, we can quickly reduce our gas consumption,” he added.
“…the strategy to move these projects forward is through the possibility of generating incentives and attracting investments.”
THE POTENTIAL
In this line, he mentioned that Bolivia has enormous potential for the development of Green Hydrogen, using photovoltaic generation, considering that the irradiation level ranges from 2 to 9.5 kWh/m2-day, urging the operationalization of this project with relevant characteristics and based in the municipality of Oruro.
He mentioned that the Green Hydrogen plant projected to operate in Oruro would be capable of producing this product at around $2.5 per kilogram, highlighting the importance of this figure as a market datum and its impact on the country’s economy.
He specified that the 65,000 tons of annual Green Hydrogen to be produced at this plant, promoted by the Oruro Governorate, would be transformed into green ammonia through relatively simple processes with a completely secured market at the national and regional levels, generating significant income for the national treasury.
He stressed the importance of developing projects where resources exist and that, in this regard, Oruro is ideal for implementing this project. “In the specific case of Oruro, we have seen that it has the highest recoverable radiation in a populated and viable location for generating electricity, so we have gone to that place.”
THE HYDROGEN INDUSTRY
Calderón was emphatic in pointing out that it doesn’t matter who drives these types of projects, ensuring that the interesting aspect is that they can enable the development of the Green Hydrogen industry in Bolivia. He added that the trend globally is towards its implementation and that the country would be in an interesting position to be one of the relevant players in the production of green hydrogen and ammonia, recommending to crunch the numbers well to make them work.
Furthermore, he mentioned that the strategy to move these projects forward is through the possibility of generating incentives and attracting investments. “As long as the rules are clear, everything else falls into place,” he stressed.
Yolanda Bueno, consultant from the IDB for project analysis and from Deloitte for the Hydrogen Roadmap at the Ministry of Alternative Energies, said that if Oruro’s dream of having its own Green Hydrogen plant materializes, it will largely be thanks to Calderón’s contributions as an investor who has been insisting on the relevance of this project at a national level.
“We want to break the paradigm that a public institution, such as the Oruro Governorate, is betting on a dream, and that dream is becoming a reality thanks to Juan Pablo,” she emphasized at the beginning of her role as moderator in the presentation “Green Hydrogen, a new business model alternative for replacing natural gas,” led by Calderón at CAEE 2024.
EXPERIENCE AND TEAM
Asked by Bueno why he insisted on this project, Calderón said, “Because we had the know-how, a team with extensive experience in mega projects around the world, a lot of knowledge about carbon credits, trading, and financing. One of the supports for the project is the collaboration and advice from Goldman Sachs. Then we had the tools to do something. If you have the tools, why not do something?”
The production of green hydrogen and ammonia is expected to attract investments of over 2 billion dollars, generate taxes, jobs, and greater technology in the department of Oruro, with an impact on the rest of Bolivia.
“Green Hydrogen can be produced through electrolysis to be used in electric vehicles or as fuel to meet commercial, transport, or industrial needs, originating from renewable energy sources and its use does not generate CO2 emissions.”
