The World needs green hydrogen supply from more competitive sources

As the global pursuit of carbon-neutrality targets intensifies, the production of green hydrogen, has emerged as a key pillar for fostering a transition to climate-neutrality. Green hydrogen, produced through splitting water molecules into its constituent parts via green-powered electrolysis, is seen as a pathway for reducing the carbon footprint of today’s CO2-intensive hydrogen production. It is particularly seen as an energy vector for decarbonizing the hard-to-abate sectors, as well as a possible long-term storage medium in a future energy system dominated by variable renewable energy sources.

In the advent of the recent Russian war and the subsequent shortage of gas supply to the European Union, many countries have increased efforts in its pursuit of other energy options, by turning to green hydrogen development. Countries like Germany has stated that it is willing to import up to 50% of its total green hydrogen needs from countries with more competitive sources, and has subsequently earmarked EUR 2 billion to support green hydrogen projects. The country created H2-Global to facilitate and catalyze green hydrogen and Power-to-X (PtX) products importation in Europe. It also set up the International Hydrogen Ramp-Up Program (H2-UPPP) to support SMEs (small and mid-size enterprises) in developing and emerging countries in pilot projects development.

In Africa, countries such as Namibia, Morocco, South Africa, Egypt, and Angola are already pursuing green hydrogen and ammonia projects in different scales. In May 2022, Kenya, South Africa, Namibia, Egypt, Morocco and Mauritania, came together to form the Africa Green Hydrogen Alliance, with aim to make the continent a frontrunner in the production and supply of green hydrogen through collaboration and sharing of best practices.

Africa has what it takes

African countries are promising partners for producing cost-competitive green hydrogen for the German market due to Africa’s abundant resources in renewable energies, coupled with its low population density and large-scale availability of non-arable land.

Several African countries, especially around the Northern and Southern Tropics have excellent solar (average daily potential of 4.49kWh/kWp) and wind resources (180,000 TWh per year) for potential green hydrogen production. Africa has an installed hydropower capacity of over 38 gigawatts (GW) and the highest untapped potential across the world, utilizing only about 11% of its capacity. Countries in North African as well as Namibia, South Africa, Angola, and Botswana, have extensive non-arable land and proximity to ports. Countries like South Africa and the Democratic Republic of Congo, have an abundance of mineral resources essential for producing solar panels, wind turbines, electric motors, batteries, electrolysers and biological carbon. All of these potentials position Africa as a viable supplier of green hydrogen and Power-to-X (PtX) products at competitive costs.

What must be considered?

Notwithstanding these fitting conditions, developed countries’ bid to import hydrogen and African countries readiness to supply it could have disadvantages, if not well planned and managed.

Firstly, more than half of Africa's population has no access to electricity. Therefore, green hydrogen production in the continent should be planned in such a way that it gives the producing African countries the opportunity to improve their energy supply in a climate neutral way, while also seizing the global market opportunities to export excess outputs to the global market. As such, green hydrogen should be produced in line with the additionality principle, such that they add value to already existing pursuits for energy security and transition in the region.

In addition, green hydrogen should also be produced in ways that it does not compete with demand for other resources like water and arable land for agriculture and other domestic uses. Since most of the viable areas for green hydrogen production in Africa, particularly in the northern and Sahel regions, also face water scarcity, efforts should be made not cause additional stress. Green hydrogen production in these sites should increase fresh water supply, through desalination and provision of other water infrastructures.

Furthermore, with its long value chain, a hydrogen economy also offers significant potential for job creation and for attracting international investment into the region of its production, thus contributing to economic growth and development. These benefits should be optimized in the African context through policies, regulations and quotas, such that solving energy crisis goes in tandem with creating jobs and improving inclusive economic growth and development. These benefits can be enhanced when most of the value chain of green hydrogen and Power-to-X production remain within the continent.

Finally, achieving a sustainable green hydrogen production in the African continent will generally require adequate consultation among all stakeholders, coupled with local level awareness and sensitization so as to optimize benefits and achieve a win-win situation in green hydrogen production and trade cooperation, among African countries and the rest of the world.

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