September 10, 2024 [Innovation News Network]- The UK and Chilean governments have recently unveiled a partnership aimed at boosting financing for green hydrogen projects.

With over £5bn in UK export credit support on offer, the collaboration is set to drive significant investment into Chile’s burgeoning renewable energy sector.

This marks a critical step in the global transition to sustainable energy sources, positioning both nations as key players in the clean energy revolution.

UK and Chile sign landmark green hydrogen agreement

The agreement was signed by Tim Reid, CEO of UK Export Finance (UKEF), and José Miguel Benavente, Executive Vice-President of Chile’s economic development agency CORFO, during a formal event at the Embassy of Chile.

UKEF, the UK’s official export credit agency, is tasked with supporting international projects that utilise British goods and services.

By pooling resources, UKEF and CORFO aim to jointly finance green hydrogen projects that will drive Chile’s renewable energy ambitions.

Under the partnership, UKEF will provide over £5bn in credit support, giving Chilean companies access to funding for large-scale green hydrogen initiatives.

The move is expected to significantly boost liquidity in Chile’s renewable energy sector while creating lucrative export opportunities for UK-based clean technology firms.

“This is a win-win agreement,” said Tim Reid. “UK businesses are world-renowned for their leadership in the clean energy sector. This partnership not only paves the way for major UK export contracts but also supports Chile’s ambitious transition to renewable energy.”

Boosting Chile’s renewables sector

Chile has set an ambitious target of sourcing at least 70% of its total energy production from renewables by 2050.

Green hydrogen, produced using renewable energy sources, is set to play a key role in achieving this goal.

The Chilean government has already committed $50m towards the development of its green hydrogen sector, and the newly signed agreement with the UK is expected to provide an additional boost.

The partnership is particularly focused on enabling long-duration energy storage through low-carbon hydrogen.

Green hydrogen allows for the flexible generation and storage of renewable energy, utilising surplus electricity that would otherwise be wasted.

By investing in these projects, Chile hopes to reduce its carbon footprint, enhance energy security, and position itself as a global leader in renewable energy.

Green Hydrogen: A cornerstone of the UK’s energy transition

The UK is also placing increasing emphasis on green hydrogen as part of its own energy transition strategy.

The recent announcement of the UK’s National Wealth Fund, which includes a £500m investment into hydrogen infrastructure and industrial clusters, underscores the growing importance of this technology.

Green hydrogen presents several key benefits to the UK’s energy transition, helping to reduce carbon emissions and ensure a more sustainable energy future.

As a clean, flexible energy carrier, hydrogen can be used to decarbonise industries that are otherwise difficult to electrify, such as steel production, shipping, and aviation.

Additionally, green hydrogen can be stored for long periods, providing an effective solution for balancing supply and demand in an increasingly renewable energy grid.

By using renewable energy to produce green hydrogen, the UK can make better use of its growing wind and solar capacities, storing excess energy that might otherwise be wasted.

This will help ensure that renewable energy can meet the country’s energy demands, even during periods of low generation.

Furthermore, green hydrogen’s potential for export offers new economic opportunities, allowing the UK to remain competitive in the global energy market.

A step towards a greener future

As both the UK and Chile ramp up efforts to scale green hydrogen production, this partnership stands as a key milestone in the global push for renewable energy.

By unlocking new financing opportunities and creating export-driven growth, the UK-Chile collaboration offers a model for international cooperation in the fight against climate change.