Schneider Electric targeting conception-stage entry into hydrogen projects

The energy transition is opening up opportunities in the electric power sector, from transmission and distribution networks to electric vehicles and green hydrogen plants.

For example, Chile's distribution networks will need revamps to support growth in the adoption of electric cars that, under a recently promulgated law, will be able to inject electricity back into the grid. 

Demand will also grow for electrolyzers needed to produce the green hydrogen that will be consumed directly and also used to manufacture derivates such as e-methanol and green ammonia. Chile is home to more than 30 green hydrogen projects, some targeting the export market, some aimed at local offtakers. 

To find out more about opportunities in Chile, BNamericas conducted an email interview with Mario Velázquez, president of the Chilean unit of French energy management solutions company Schneider Electric.

BNamericas: It seems that Chile's energy transition will generate opportunities for companies like Schneider Electric in energy efficiency, distribution network modernization, and electric vehicles: buses, cars, industrial vehicles. What’s your view and when could we see concrete opportunities – or is this already happening?

Velázquez: Indeed, the energy transition is opening up many opportunities for companies in areas that we were not involved in until a few years ago. Energy efficiency is one of them and in the case of Schneider Electric we have products and solutions, such as EcoStruxure Power, that allow organizations to increase their operational efficiency, reduce their electricity costs and comply with established standards.

Regarding electromobility, we currently have EcoStruxure, which offers the most reliable solutions to enable the digital transformation of the automotive industry, and to develop an intelligent charging experience anytime, anywhere. Our goal is to be a contribution to people and companies in terms of electromobility, promoting care for the environment, as in everything we do.

In terms of distribution, it is our area of expertise and we offer different electricity distribution solutions so that our partners and clients increase their productivity while optimizing their budget, because our services are comprehensive; therefore, they cover the entire life cycle of the electrical distribution equipment assets, helping to improve efficiency, reduce downtime, and lower safety risks and cost risks.

BNamericas: The Chilean government is working on a short-term plan to promote electric vehicles. A significant barrier today for widespread adoption is the high prices of such vehicles. But in terms of associated electrical infrastructure, what investments are needed to support and enable the expansion of this segment?

Velázquez: Electromobility, to succeed, requires effort from all sectors involved. It is not enough just for vehicle brands to bring electric models to the country, but companies must also commit to making this reality work. In the case of Chile, there is still a lot of investment to be made to spread this trend, one that is a force for good on the planet. There is a lack of charging points both in Santiago and in the rest of the country; but most importantly, there is a lack of knowledge and education, because most people do not know how to charge an electric vehicle, they do not know if they can do it at home, how much would it increase electricity expenditure.

BNamericas: What are your general views on green hydrogen?

Velázquez: For now, at Schneider Electric Chile we are not part of any green hydrogen project. The world needs to decarbonize, fast, and hydrogen will have a role to play in future decarbonization. Likewise, electrification is one way to reach 1.5C and can work alongside the proliferation of green hydrogen.

If we look at it from an engineering perspective, this is all about the efficiency of the process and to make hydrogen you need to create electricity. 

It has to be simple; I mean, simple works because it is more efficient and the other option requires a lot of ingenuity. 

Quite frankly when I look at the cost of renewables, I look at the storage value of a battery. Therefore, there is no doubt that electricity is everywhere and that our future will be electric.

BNamericas: Your parent company is working with a manufacturer of electrolyzers. What is the purpose of this collaboration and what would be the benefits for Schneider Electric?

Velázquez: An electrolyzer is a device that allows the production of hydrogen through a chemical process (electrolysis). It is an important supply-side complement in the sphere of generation, given that at Schneider Electric we have products and solutions geared to electricity, transmission, distribution and protection – and these electrolyzers are part of power generation.

The benefit of this ‘partnership’ is that it will allow us to have privileged information on H2 projects. Additionally, it enables us to have access to key personnel in order to boost our portfolio.

For Schneider Electric it is key to have a presence from scratch in projects of this type, since it gives us the opportunity to offer a complete connected solution such as our EcoStruxure platform; as well as having a presence in process management, monitoring through our strategic partners Aveva.

The electrolyzers, to draw a comparison, are going to be the future transformers, which, today, drive the purchase decision of a complete project.

BNamericas: Environmental, social and governance, or ESG, is part of the fabric of your business. What are Schneider's initiatives in this area? Schneider clearly sees value in such a strategy. Do you think that, nowadays, Chilean companies with long-term growth plans, come what may, must adopt and implement an ESG strategy?

Velázquez: For us as Schneider Electric it is fundamental to adopt ESG criteria responsibly and they are part of our DNA. In fact, we were recently rated the best in our industry by three leading ESG rating providers. This recognition included first among electrical equipment and components companies in the 2022 Corporate Sustainability Assessment conducted by the renowned rating agency S&P Global; first place in the Electronics & Equipment sector by Vigeo Eiris, the main European ESG rating agency of Moody’s; and A on the 2022 list of companies recognized as leaders in transparency and environmental action compiled by [environmental impact disclosure non-profit] CDP.

This is very relevant in the current context we live in and with this type of recognition we show how it is possible to stay focused on what matters most: people, the planet and performance. We are committed to the well-being of all our stakeholders – internal and external - and, most importantly, to the well-being of the planet because we are all an important part of the fight against climate change.

At the local level, for example, our Santiago plant is certified as net zero; that is, it does not produce carbon emissions, reaffirming our commitment to the environment. In addition, we work together with different organizations with a social focus and have signed strong alliances with [technical training institute] Ceduc UCN, [platform for women in the construction industry] Red Maestra and [housing charity] Techo, where to date we have helped train more than 500 people in Chile.