## 7 Discussion
### Scale Economies and Production Costs of Green Hydrogen  
The need for a transition to cleaner energy sources has driven interest in green hydrogen as a key energy vector in the decarbonization of various industrial sectors. However, its large-scale adoption depends largely on its economic viability. In this context, analyzing the economies of scale and costs associated with its production are essential to understand its competitiveness compared to other energy alternatives [60; 61; 62]. The first factor influencing green hydrogen production costs is the cost of electricity production. Depending on the type of renewable energy and the number of annual operating hours, between 60% and 70% of the total cost of green hydrogen is related to electricity consumption. Therefore, ensuring access to abundant, reliable, and affordable renewable energy is essential [63]. In regions with consistently strong winds, such as the Magallanes region, the southernmost point of Chile, this factor can be a significant benefit. Furthermore, according to data from the Global Wind Energy Council (GWEC), global installed wind power capacity has experienced sustained growth over the past decade, with an average annual growth rate exceeding 30% [17]. Another factor influencing the price structure of green hydrogen is the cost of electrolysis. The electrolyzer has a high initial investment cost, which includes auxiliary systems, compressors, converters, and cooling systems. Currently, large-scale electrolysis infrastructure is underdeveloped. However, according to the International Renewable Energy Agency (IRENA), it is estimated that the price of electrolyzers could decrease by up to 60% by 2030 with industrial scaling [53]. Third, the distribution of green hydrogen presents significant logistical challenges that exponentially increase its production costs. This is because hydrogen, due to its low energy density per unit volume, needs to be compressed at high pressures or converted to its liquid state at very low temperatures for transportation and storage [52]. Furthermore, the existing natural gas infrastructure is not easily compatible with hydrogen, which requires considerable investments in the construction of new gas pipelines or the adaptation of current networks. Added to this are the costs associated with the gradual dismantling of natural gas networks [59]. Moreover, unlike synthetic fuels, hydrogen does present technical risks as it requires modifications to the infrastructure or engines in which it will be used. Hydrogen-based fuel cells are very expensive, while hydrogen-powered engines are a more economical option but their use is very limited [64]. The cost competitiveness of hydrogen applications will improve over time as production scales increase. As the production capacity increases, unit costs decrease due to the distribution of fixed costs over a larger production volume and improved operational efficiency. Several recent studies indicate that scaling up production can result in a 60-70% reduction in unit costs. Furthermore, automating the manufacturing of gigawatt-scale electrolyzers could generate substantial cost reductions [20]. In other words, as utilization increases and economies of scale are achieved, green hydrogen costs are projected to decrease by up to 70% over the next decade, allowing it to be dispensed at a price of approximately USD 4.50-6 per kilogram [54]. The development of a large-scale hydrogen economy cannot be achieved solely through technological innovations or improvements in production efficiency. Here, regulation plays a crucial role. It is essential to establish solid and coherent regulatory frameworks that provide a stable regulatory environment and adequate incentives to attract private investment and encourage the development of critical infrastructure and the scaling of this technology. Current GH2 production costs in some regions (notably South America) are reported at USD 1-1.5/kg, which is significantly lower than global benchmarks of USD 4-6/kg.