Recommendations to Deploy Economic Instruments to Catalyze Chiles Energy Transition

• Country: Chile
• Summary: Recommendations to Deploy Economic Instruments to Catalyze Chiles Energy Transition
• CLT Ref No: 52722101
• Deadline: 06 May 2021
• Financier: World Bank (WB)
• Purchaser Ownership: Government
• Tender Value: Refer Document
• Notice Type: Tender
• Document Ref. No.: 1274500
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• Description:
• Expression of Interest are invited for Recommendations to Deploy Economic Instruments to Catalyze Chiles Energy Transition. REQUEST FOR EXPRESSION OF INTEREST FOR SELECTION # 1274500 This Request for Expression of Interest is for a Firm Selection. Please log in as a valid Firm User if you wish to express interest in this selection. Selection Information Assignment Title Recommendations to deploy economic instruments to catalyze Chiles energy transition Publication Date 29-Apr-2021 Expression of Interest Deadline 06-May-2021 at 11:59:59 PM (Eastern Time - Washington D.C.) Language of Notice English Selection Notice Assignment Country · CL - Chile Funding Sources The World Bank Group intends to finance the assignment/services under: · BB - BANK BUDGET · TF0B5327 - Green Hydrogen Development in Chile - Technical Assistance Individual/Firm The consultant will be a firm. Assignment Description SELECTION FOR CONSULTANTS BY THE WORLD BANK GROUP REQUEST FOR EXPRESSIONS OF INTEREST Electronic Submissions through World Bank Group eConsultant2 https://wbgeconsult2.worldbank.org/wbgec/index.html ASSIGNMENT OVERVIEW Assignment Title: 1274500 - Recommendations to deploy economic instruments to catalyze Chiles energy transition Assignment Countries: - Chile ASSIGNMENT DESCRIPTION The objective of the proposed assignment is to provide in-depth recommendations and a roadmap to establish a comprehensive and well-targeted economic instrument scheme in Chile to catalyze the energy transition needed to comply with Chiles NDC and its carbon-neutrality commitment. The assessment should specially consider the role of carbon pricing instruments in accelerating the growth of a green hydrogen industry in the country. The economic instruments should aim to incorporate climate externalities in fuel and energy carrier markets, harmonizing existing instruments and recommending new instruments. FUNDING SOURCE The World Bank Group intends to finance the assignment / services described below under the following: - BANK BUDGET - Green Hydrogen Development in Chile - Technical Assistance ELIGIBILITY Eligibility restrictions apply: [Please type list of restrictions] INDIVIDUAL / FIRM PROFILE The consultant will be a firm. SUBMISSION REQUIREMENTS The World Bank Group now invites eligible firms to indicate their interest in providing the services. Interested firms must provide information indicating that they are qualified to perform the services (brochures, description of similar assignments, experience in similar conditions, availability of appropriate skills among staff, etc. for firms; CV and cover letter for individuals). Please note that the total size of all attachments should be less than 5MB. Consultants may associate to enhance their qualifications. Interested firms are hereby invited to submit expressions of interest. Expressions of Interest should be submitted, in English, electronically through World Bank Group eConsultant2 (https://wbgeconsult2.worldbank.org/wbgec/index.html) NOTES Following this invitation for Expression of Interest, a shortlist of qualified firms will be formally invited to submit proposals. Shortlisting and selection will be subject to the availability of funding. Only those firms which have been shortlisted will receive notification. No debrief will be provided to firms which have not been shortlisted. Attachments · Optional TOR File Qualification Criteria · 1. Provide information showing that they are qualified in the field of the assignment. · 2. Provide information on the technical and managerial capabilities of the firm. · 3. Provide information on their core business and years in business. · 4. Provide information on the qualifications of key staff. The World Bank TERMS OF REFERENCE Consultancy Services for Technical Assistance Activity: Recommendations and steps needed to deploy an economic instrument scheme that catalyzes the energy transition needed to comply with Chile-s NDC and net-zero GHG emissions goal. I. BACKGROUND Chile-s race to zero emissions and the role of Green H2 Chile is prioritizing green hydrogen development to decarbonize its energy intensive sectors and meet its NDC targets. The Government of Chile (GoCl)considers the development of green hydrogen industry a critical enabler to reach their goal of carbon neutrality by 2050 and comply with its Climate Change Framework Law currently in Congress, while enabling a socially just energy transition. Chile updated its NDC setting an ambitious commitment to achieve carbon neutrality by 2050 - including an absolute mitigation goal, a maximum peak by 2025 and a carbon budget. One of the outstanding measures of the updated NDC is the development of green hydrogen, which could help reduce up to 21% of the necessary GHG reductions by 2050. The comparative advantages of Chile for the development of a green hydrogen economy are apparent throughout the green hydrogen value chain, and present multiple opportunities for lessons learned and replicability. Chile has substantial renewable energy sources at very competitive prices and a vast potential to keep expanding them, which strongly complements the development of green hydrogen. The country also has strong off-takers to develop green hydrogen for industrial sectors, including mining and transport sectors, as well as green ammonia production, which can additionally support maintaining the competitivity of these industrial sectors and lowering air pollution. It is in this context that the Ministry of Energy (MoE) launched The National Green Hydrogen Strategy (Strategy) in 2020 at the 3rd International Green Hydrogen Summit, which establishes ambitious goals for this clean energy source. The main objectives of the Strategy are: (i) to have 5 GW of electrolysis capacity built and under development by 2025; (ii) be the world's most competitive producer of green hydrogen by 2030; and (iii) be one of the 3 largest exporters of green hydrogen and its derivatives by 2040. Green hydrogen is in an emerging stage in Chile, with pilots and demonstration projects still under development, and important complementary measures can support its development, including the use of carbon pricing. There are still challenges to scale production and applications of green hydrogen, including key barriers perceived such as, information asymmetries, few uncoordinated demanders and suppliers, technological and financial risks, as well as cost gaps with fossil fuels. Initiatives that support early green hydrogen projects and improve their competitiveness against fossil fuels will help initiate a functioning market, while at the same time reduce uncertainties and enabling economies of scale. Among the actions determined by the Strategy to resolve these gaps, is the initiative of establishing a public-private roundtable to discuss a roadmap to carbon pricing and taxes that better reflect the negative externalities of fossil fuels, and thereby help promote green hydrogen. Chile-s Carbon Pricing Strategy and Participation at the PMR In September 2014, the GoCl approved a tax reform that included a green tax scheme (Law 20.780): (i) Green tax on vehicle purchases, mandated to be implemented in 2015, and (ii) Green tax on fixed source emissions of carbon dioxide, particular matter, sulfur dioxide and nitrogen oxides, mandated to be implemented in 2017. The MoE has been the focal point of the Partnership for Market Readiness (PMR) project, which has supported the improvement and implementation of the green tax on fixed sources. In addition to creating new knowledge and awareness on carbon pricing in Chile, the PMR project was instrumental in the identification of shortcomings in the design of the tax and has proposed modifications to the carbon tax design, i.e., the new tax base thresholds and the offsetting system, introduced in August 2018 and approved by Congress in January 2020. A PMR extension is supporting the implementation of these improvements. Moreover, targeted discussions throughout the entire PMR project period triggered parallel discussions, in formal public-private round tables, on emission trading schemes (ETS), certificates (green, white, offsets) and Article 6, all of which are fully operational to date and chaired by MoE. This open interaction with diverse domestic stakeholders has eased Chile-s engagement in international carbon pricing settings such as the Carbon Pricing in the Americas, the Climate Warehouse, the Carbon Market Club, the APCMR and in some bilateral agreements on carbon pricing and on Article 6 of the Paris Agreement (i.e., with Quebec, Switzerland and Sweden). II. OBJECTIVE OF THE ASSIGNMENT The objective of the proposed assignment is to provide in-depth recommendations and a roadmap to establish a comprehensive and well-targeted economic instrument scheme in Chile to catalyze the energy transition needed to comply with Chile-s NDC and its carbon-neutrality commitment. The assessment should specially consider the role of carbon pricing instruments in accelerating the growth of a green hydrogen industry in the country. The economic instruments should aim to incorporate climate externalities in fuel and energy carrier markets, harmonizing existing instruments and recommending new instruments.   III. SCOPE OF WORK The Consultant will carry out the following tasks: Task 1: Design and assess 3 different economic instrument scenarios . The consultant shall design and assess 3 economic instrument scenarios that aim to accelerate the energy transition, especially the development of the green hydrogen industry. These scenarios and their baselines will be agreed with the technical counterparts of inter-ministerial group involved in this study. The consulta
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