Looking into the opportunities of Hydrogen in Africa for a project I am preparing, I felt the need to summarize some of my thoughts in this blog post. It is very interesting to read about the potential outlook in publications from the African Development Bank and European Investment Bank.
Hydrogen has a very large potential to aid decarbonization of the global energy mix. In the case of Africa hydrogen is less about decarbonization of the domestic energy mix (Africa already has a very low GHG contribution) but more about harnessing the vast resources and to leapfrog towards high GDP growth in a net zero and sustainable way:
- Securing energy for domestic and trade use to fuel development.
- Ensuring this energy is zero emission and renewable.
Hydrogen, mostly green but also blue or even brown, could fuel this development and ensure Africa a place in a growing market that is just starting. As opposed to the current fossil fuel era, that is mostly dominated by the northern hemisphere, Western and Middle East companies, and countries.
Africa has massive, underutilized resources such as solar, wind and hydro power. It has the space to accommodate renewable electricity at a very large scale which is needed to create high hydrogen production. In addition, some countries like Mozambique have huge natural gas deposits which in combination with carbon capture and storage can also be used for the production of blue hydrogen. This combination can create low-cost low carbon hydrogen in various colors for domestic use and development as well as international trade.
It is already clear that for example Europe will not be able to domestically produce all the demand for renewable energy. Low-cost hydrogen in the form of ammonia or directly by pipeline can be transported to Europe for use in heavy industry and transport. Africa has excellent transportation links or has the potential to build these. Creating a revenue stream to aid further development and economic growth, without adding to the carbon budget of the world. And in addition, decarbonize domestic energy use as well.
Essentially Africa is in an excellent position to be at the forefront of establishing a hydrogen economy, supplemented by other renewable energy applications and electrification.
Massive investments have been announced in Namibia, South Africa, Kenya and North Africa with projects totaling tens of billions USD. Pipelines for example in South Africa to transport hydrogen to industrial clusters and harbors for transport. Namibia announced a very large hydrolyzer project of 2 gigawatts production. All these projects are of course in the planning stage but it indicates the importance and potential of hydrogen as a market.
In addition, large budgets have been promised following COP26 for South Africa (8.5 billion USD) for accelerating the energy transition of which hydrogen is a significant part. The availability of this budget can be a game changer for South Africa and kickstart homegrown domestic renewable energy technologies and companies that produce, store and use hydrogen in various forms. The abundant availability of minerals and rare earth metals as well can be a powerful tool for battery production and fuel cell technology. Access to these materials is already becoming a prerequisite for companies like Tesla and Northvolt to establish mega factories in certain locations. South Africa and Africa as a whole has this availability.
Of course the technology is not always completely proven thus it is essential to choose the correct and most appropriate ones for Africa. And despite the abundant financial commitments made obtaining specific finance for projects can be challenging. But this also creates opportunities. African countries should continue to focus on this and:
- Create collaborative innovation platforms to strengthen research and the development of sustainable technologies that can be easily maintainable from Africa to continuously improve the competitiveness of the sector.
- Build the hydrogen energy infrastructure to support H2 production and efficient storage, transport and refueling facilities.
- Communicate the value of green hydrogen and promote its use in the productive sectors.
- Establish or improve the legal frameworks for hydrogen to support the whole value chain.
The global race for hydrogen is on and South Africa has an excellent position to succeed in this race.
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Leon Stille is managing director of New Energy Institute. New Energy Institute is focused on expert advice, education, and innovation, consulting for companies like BCG, Shell, TNO, Berq RNG and several investment firms. He is also key lecturer for renewable gas and hydrogen for New Energy Business School, expert speaker on energy transition topics for several universities (MBA energy transition of the University of Groningen and University of Rotterdam) and often speaks and moderates at key industrial conferences and events. He also holds several advisory positions at the European Biogas Association, Hydrogen Europe and committee member sustainability of the international gas union. Leon holds 3 patents on renewable gas purification and conversion.