With ongoing power outages and global pressure to reduce carbon emissions, South Africa needs to carefully consider the opportunities presented by green hydrogen.
As South Africa grapples with ongoing power outages because the power company’s grid cannot keep up with demand or maintenance, the country also faces pressures global organizations to reduce its carbon footprint and adopt renewable energy resources.
That pressure came with the offer of aid, however, as the country secured funding of 131 billion rand (roughly $ 10 billion) at the recent COP26 to switch to green energy. However, even with the recent increase in the distributed generation threshold to 100 MW, it will take time for projects of any size to be brought into service and to relieve pressure from the national grid.
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Overview of the hydrogen economy in Africa
In addition to solar and wind energy resources, which South Africa has in abundance, discussions have emerged around hydrogen – particularly green hydrogen – and what that could mean for the carbon footprint. of South Africa and its economy.
South Africa is one of the best placed countries in the world to produce green hydrogen without emissions, in which renewable energy is used to power the water electrolysis process by which hydrogen is harvested. This is thanks to the country’s vast solar and wind resources and the fact that we have a long coastline with access to water that could be used in the process. These factors position South Africa well to supply countries in search of green hydrogen but which do not have the natural and renewable resources to produce it, such as Japan and the countries of the European Union.
Green hydrogen promises to be a good investment for the future
Currently, green hydrogen only accounts for 0.1% of global hydrogen production, but the falling costs of harvesting renewable energies and the falling costs of electrolysis technology clearly indicate that green hydrogen could be a significant investment in a clean energy future. Indeed, the United Nations Green Hydrogen Catapult Initiative aims to increase the production of green hydrogen by 50 times over the next six years, with the intention of reducing production costs to less than two dollars per kilogram.
However, the country is not ready to use hydrogen energy on its own – our tax regime makes all vehicles other than internal combustion vehicles too expensive for most people and there is little political will to move away from coal-based electricity generation. Hydrogen is also an expensive energy resource that individuals and local organizations are unlikely to be able to afford.
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Hydrogen energy saving for South Africa seems more achievable
However, South Africa has significant potential to boost its economy by creating and developing a hydrogen export economy. In addition to boosting job creation and work opportunities in hydrogen harvesting plants, this could lead to massive infrastructure development and improvement.
We have seen the potential of this in our work with the NorthH2 project in the Netherlands, which includes the entire green hydrogen value chain, from wind farms to create power, to the pipelines that will deliver energy. hydrogen to industries in northwestern Europe and to the underground storage facilities in underground salt caves.
A South African-wide project of this nature could lead to improvements in the country’s port infrastructure, in turn stimulating other sectors to use these facilities and bring even more trade to the country.
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Sasol takes the lead of the green hydrogen project in South Africa
A study is already underway in KwaZulu-Natal, surveying public opinion on how the hydrogen industry would be received in the region and examining potential opportunities. This local approach to a global opportunity is vitally important – because it simply won’t work for local operations to copy and paste what has already been done in Europe and the United States of America.
South Africa needs to carefully consider the opportunities that hydrogen presents and engage with experienced experts who can help government, Ministry of Minerals and Energy, local government and investors successfully navigate to the economic benefits of investing in this alternative energy source.
Gladys Nabagala is Director of the Energy Transition Advisory Group at Royal HaskoningDHV