The production and export of green hydrogen is one piece of the puzzle contributing to the global energy transition, with other “pieces” including renewables, energy-efficient design principles and behavioural changes. In South Africa’s context, it could achieve so much more than the shift away from carbon dependence: it could unlock economic opportunities
across the country.
While those economic opportunities are a “carrot” for the country’s energy policymakers and manufacturers, the “stick” is the changing global trade environment. The European Union, South Africa’s biggest trading partner by revenue, intends to implement its Carbon Border Adjustment Mechanism in 2023, which would impose additional tariffs on carbonintensive products such as cement.
South Africa holds three significant structural advantages for producing green hydrogen for export. Our size and climate mean that we have large scale high quality renewable energy
sources from solar and wind energy – boasting some of the highest average load factors in the world.
We have abundant land in proximity to oceans, and apart from producing green hydrogen, just 1%of South Africa’s land area could produce 10 megatons of the fuel, providing the
by-product of desalinated water at less than 1c per kilogram. This would help water-stressed communities achieve water security.
South Africa already has several infrastructure assets and abundant and world-class academic expertise in the field, including Sasol’s proprietary Fischer-Tropsch process used to produce synthetic hydrocarbons such as methane, diesel and jet fuel. This all means that we’ve already got great starting blocks in place.South Africa already has several infrastructure assets and abundant and world-class academic expertise in the field, including Sasol’s proprietary Fischer-Tropsch process used to produce synthetic hydrocarbons such as methane, diesel and jet fuel. This all means that we’ve already got
great starting blocks in place.
“South Africa is not ready for regular citizens to use hydrogen-based energy itself though,” notes Gladys Nabagala, director of the Energy Transition Advisory Group at Royal HaskoningDHV. “Our tax regimen renders any vehicles other than internal combustion rides too expensive for most people, and there is little political will to move away from coal-based power generation. Hydrogen is also an expensive energy resource, which most
local individuals and organisations are unlikely to be able to afford.”
It could, however, be used to replace diesel in rail applications, and to replace existing energy sources in shipping and aviation – particularly at large scale sites like airports. Other operations that could potentially use hydrogen power are high energy demand sites, like mining or beneficiation businesses, cement factories, and refineries.
South Africa is the world’s largest producer of platinum group metals, producing 75% of global output of this group. However, much of this is beneficiated outside the country –
and the Department of Science and Innovation has identified bringing this beneficiation process home as a key economic opportunity and driving force for the green hydrogen industry. There is potential for green hydrogen to change the power generation
industry completely: gas turbines producing energy that operate on pure hydrogen are expected by 2030. Locally, through microgrids, hydrogen energy could supply back-up power to reduce power outages, supply power for communications infrastructure – particularly in remote areas – as well as providing electricity and heat to commercial and public buildings. This all falls under the South African Renewable Energy Masterplan.
Because of the massive water requirements for green hydrogen production, it’s coastal areas that will see the most benefit when it comes to the infrastructure development and
job creation that will make South Africa’s participation in the green economy possible. Saldanha, Cape Town, Gqeberha, Ngqura, East London, Durban and Richards Bay have all
been earmarked as potential sites either for green hydrogen production, or to facilitate its export.
Nabagala notes that there is already a study under way in KwaZulu-Natal, surveying public opinion on how the hydrogen industry would be received in the area, and examining potential opportunities. This local approach to a global opportunity is vitally important,
as it simply won’t work for local operations to copy and paste what’s been done in Europe and the US.
