South Africa: Green hydrogen could unlock RE boom

Social and political support for the industry could be negatively impacted if the local electricity supply crisis is not solved

Green hydrogen has the potential to increase the local renewable energy industry and generation infrastructure by using production flexibility and the ability to enlarge equipment in order to sell power into the national grid.

This is according to a study that explores the potential for South African green hydrogen (GH₂) producers. The study was authored by B. Cloete of Connect Economics in the UK, B. Cohen of the University of Cape Town, and T. Uhorakeye of GFA Consulting Group in Germany.

It highlights the potential for establish a mutually reinforcing growth cycle between renewable energy and green hydrogen, which would then contribute not only to the mitigation of greenhouse gas emissions but to the local economy and broader society.

The study indicates that South Africa is well positioned to produce sufficient hydrogen at competitive costs for both local and export markets, primarily due to its extensive renewable energy resources, land availability and its existing know-how.

“An average of 2500h of sunshine per year and high radiation levels make the country ideal for generating solar power. The total wind power potential is estimated at 6700GW – roughly on par with the solar potential. 

“It also has large open land spaces for building of infrastructure, with many open sites being close to the coast, which presents the opportunity for using seawater for hydrogen production – albeit with a requirement for the construction of desalination infrastructure to purify the water prior to electrolysis.”

South Africa could play a significant role in global decarbonisation efforts

The paper states that if the country could capture the opportunity, including securing markets and the necessary investments, it could play a significant role in global decarbonisation efforts.

According to the paper, the green hydrogen produced in electrolysers using renewables is currently more expensive than grey hydrogen produced from natural gas and black hydrogen from coal. Consequently green hydrogen derivative products are more expensive than their fossil fuel alternatives. 

“Work done under the 2023 GIZ study referenced previously suggested that cost parity for green hydrogen in South Africa could start to be reached by around 2030 (assuming a ramp-up in the carbon tax) and only after 2040 for green hydrogen derivatives, including ammonia, green steel, green methanol and sustainable aviation fuels.”

Zooming in on the potential role for green hydrogen in SA’s Just Energy Transition (JET), the paper states that green hydrogen has been identified as potentially having a significant role to play in the JET. 

It says it could provide employment opportunities in areas which are currently dependent on fossil fuels and in areas with high unemployment rates, due to renewable energy resources often being located in rural and underdeveloped regions. 

“Furthermore, green hydrogen could be a significant contributor to local industrial development and foreign revenues from the sale of GH₂ and derivatives on the export market. Green hydrogen also provides an opportunity to avoid stranded assets during the JET.” 

Touching on risks to the green hydrogen industry, the paper warns that social and political support for the industry could be negatively impacted if the local electricity supply crisis is not solved. 

It said renewable energy investments to support green hydrogen production could then be seen as diverting electricity away from supplying local consumers, industry and critical services.

“To combat this perception, green hydrogen projects will need to be designed in a way that leads to additional electricity supply being made available to the grid, for example, by oversizing renewable energy capacity to enable excess electricity to be sold as discussed above – and that this benefit is communicated clearly while the projects are being considered,” it said. 

Cover photo:  scharfsinn86©123RF.com