SA Must Be Worlds Green Hydrogen Investment Destinatio

President Cyril Ramaphosa delivers the keynote address at the South Africa Green Hydrogen Summit in Cape Town on Tuesday. (Photo: GCIS) President Cyril Ramaphosa says South Africa aims to become a ‘world leader’ in green hydrogen production, being well placed with a wealth of renewable resources — and the economic and social opportunities that come with developing the sector tie in with our Just Energy Transition goals.
‘South Africa is an investment destination, some say of choice, but I say it is a must destination for investment,” said President Cyril Ramaphosa during his keynote address at the South Africa Green Hydrogen Summit in Cape Town on Tuesday morning.

The special-edition Sustainable Infrastructure Development Symposium South Africa (SIDSSA) is focusing exclusively on Green Hydrogen, running from Monday to Wednesday this week, and deals with South Africa becoming a potential global exporter of green energy with major investment support from Sasol and Anglo American.

The Green Hydrogen Summit follows the conclusion of the UN Climate Change Conference (COP27) in Egypt where Ramaphosa was commended by world leaders for SA’s R1.5-trillion Just Energy Transition Investment Plan (JET-IP).

Read more in Daily Maverick: “Funding a greener future — Ramaphosa outlines South Africa’s R1.5 trillion three-step energy transition plan”

Speaking of the JET-IP at the summit on Tuesday, Ramaphosa reiterated that according to the plan, South Africa would need about $98-billion or R1.5-trillion over the next five years to enable a just transition and achieve its ambitious emissions reduction targets.

Ramaphosa highlighted that in the JET-IP, green hydrogen was one of the four “big frontiers”, which indicated that it had huge growth and investment potential.

“And as we say in our country, we want this just transition to leave no one behind,” said Ramaphosa.

“It needs to address the needs of workers, it needs to address the needs of communities that are affected. But more importantly, it also needs to lead to economic development… sub-industries spawning in the areas where we are going to have these [green hydrogen] projects implemented.”

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Hydrogen, commonly produced by a process called hydrolysis — where electricity is used to split water molecules into hydrogen gas and oxygen atoms — can act as an energy carrier.

So far South Africa only produces “grey hydrogen”, which means the process of hydrolysis is powered by fossil fuels. “Green hydrogen” uses renewable energy in the process of producing hydrogen

Read more in Daily Maverick: “Green hydrogen — how South Africa can capitalise on it, and why we need to do it fast”

Tobias Bischof-Niemz, energy expert and CEO of renewable energy company ENERTRAG South Africa, previously told Our Burning Planet that the benefits of green hydrogen are long-term storage, economic opportunities from exporting it to other countries, and decarbonising the environment.

Ramaphosa spoke about the export potential of green hydrogen in his keynote address, highlighting that global demand for green hydrogen and green hydrogen-based products, such as ammonia and synthetic jet fuels, is rising significantly.

The International Energy Agency’s (IEA) recent Breakthrough Agenda Report 2022 recommended that global leaders ramp up the development of low-carbon and renewable hydrogen, setting a target of 150 million tons of green hydrogen by 2030.

As there was less than a million tons of green hydrogen globally in 2020, this would require doubling production each year from today.

“This presents a unique opportunity for South Africa to link its mineral endowment with its renewable energy endowment to drive industrialisation,” said Ramaphosa, adding that at the same time, “it will create jobs, attract investment, bring development to rural provinces and support a just transition from fossil fuels.”

Ramaphosa said it was estimated that South Africa had the potential to produce six to 13 million tons of green hydrogen and derivatives a year by 2050, which would require between 140 and 300 gigawatts (GW) of renewable energy.

Today, SA has just over 6GW of renewable energy connected to the national grid.

Ramaphosa said the focus would be on green hydrogen exports, electrolyser and fuel cell production, manufacturing green steel, sustainable aviation fuel, ammonia, fertilisers and renewable energy components.

Internationally competitive
“This country is a favourable, reliable and stable place to conduct business. We are driving regulatory and legislative reform to make the South African economy more competitive, to attract more investment so that we can create more jobs,” said Ramaphosa.

Ramaphosa emphasised that South Africa’s inherent advantages lie in its “world-class endowment” of onshore wind and solar irradiation, experience with deploying renewable energy with the largest instalment of wind solar and solar projects in the continent and a supportive legislative environment — all of which make it internationally competitive.

The President highlighted that SA already had companies such as Sasol and PetroSA that had expertise in the production of synthetic fuels.

Bischof-Niemz said Sasol’s synthetic fuel plant in Secunda, Mpumalanga, had a Fischer-Tropsch reactor, which used hydrogen and carbon monoxide to create liquid hydrocarbons, such as petrol and aviation fuel. While it created high carbon emissions now, if green hydrogen was used instead, it could be a game-changer in decarbonising aviation.

Projects under way
Minister of Public Works and Infrastructure, Patricia de Lille, told the summit that the Department of Public Works and Infrastructure and Infrastructure South Africa (ISA) had gathered a pipeline of green hydrogen with a value of more than R300-billion, but much of this needed further project preparation support to reach financial close:

“Government will work with the green hydrogen sector to create an enabling environment for investors… to create much-needed jobs for our people.”

Ramaphosa noted that some of these projects in his keynote address, including Sasol and the Northern Cape provincial government’s master plan for a green hydrogen special economic zone, which aims to support 40GW of electrolyser capacity by 2050, The Prieska Power Reserve Project, and nine projects that are part of the Hydrogen Valley initiative that aims to link the three hydrogen hubs of Mogalakwena in Limpopo, Johannesburg and the Durban-Richards Bay hub.

“Our country is not only determined,” said Ramaphosa, “it aims to become a world leader in green hydrogen.”

Hydrogen and the car industry
Along with a focus on green hydrogen development as a tool to decarbonise, there is a big international push toward decarbonising the transport sector.

Bischof-Niemz explained to Our Burning Planet that there are a few categories when people talk about electric cars. Battery-electric vehicles that need electricity to charge the battery; fuel cell electric vehicles that use hydrogen to produce electricity on board and hybrids that can use electricity or hydrogen, or both, to create power.

The IEA’s Breakthrough Agenda Report found that only 1% of cars on the road in 2021 were zero tailpipe emission vehicles (ZEVs) globally, much lower than the 20-25% needed to meet climate targets by 2030.

Our Burning Planet previously reported that the South African vehicle manufacturing industry — which now solely produces internal combustion engine vehicles [ICEVs] — is at risk now that global demand is shifting to meet these targets.

Ramaphosa said the Department of Science and Innovation had been researching green hydrogen in South Africa since 2007 through Hydrogen South Africa, in part due to the impact the transition from ICEVs toward electric vehicles would have on our platinum mining industry.

“Together, South Africa and Zimbabwe hold over 90% of the world’s known platinum group metal reserves,” said Ramaphosa.

“Since 30 to 40% of the supply goes into the production of catalytic converters for internal combustion vehicles, the initial focus of the research was on hydrogen-powered fuel cell electric vehicles as an alternative market to the internal combustion engine vehicle.”

Ramaphosa said during his recent UK visit, he was told there would be a ban on the use of petrol and diesel in the next few years. However, “as we already export vehicles to them it presents an opportunity for us, as we have decided to move to electric vehicles.

“Some people fear this just energy transition,” said Ramaphosa, “and I say, we will be able to open up new sectors in our economy that are going to create many more jobs.” DM/OBP

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