Green hydrogen corridor for economic growth in Northern and Western Cape

The Western Cape and Northern Cape have signed a Memorandum of Understanding to develop a green hydrogen corridor and hub.

The MoU contains heads of agreement on the principles and areas of cooperation towards creating the Western SADC Green Hydrogen Corridor.

Western Cape Premier Alan Winde said the MoU is the beginning of the development of a green hydrogen economy based on critical relationships – in this case with the Northern Cape and the role players in the private sector.

“We cannot afford to wait for solutions to be delivered to us to address the dual challenges of the climate and the energy crisis, both of which continue to worsen. We, along with our strategic partners, must create and jump on opportunities,” said Winde.

He toured the mothballed Saldanha Steel plant which will form a crucial component of the planned Western SADC Green Hydrogen Corridor. The Western Cape will also be able to take advantage of the planned new bulk export port at Boegoebaai in the Northern Cape.

“This project will secure foreign direct investment, earn foreign revenue as well as generate economic growth and jobs. There must be a sense of urgency in this project, given the seriousness of the challenges we are facing,” added Winde.

Unlocking investment into proposed green hydrogen corridor

Meanwhile the Public Investment Corporation (PIC) said it has now adopted a hydrogen investment strategy to unlock value through funding and provision of early-stage capital to develop the hydrogen value chain in South Africa. The PIC strategy will beto leverage the more than 200 hydrogen projects announced worldwide.

The PIC believe it will take approximately R4.3 trillion ($250 billion) in investment to develop a hydrogen economy in South Africa. The South African Hydrogen Roadmap identifies the PIC as a potential co-investor with other finance institutions into hydrogen projects.

The Roadmap identifies hydrogen as the next frontier in clean energy technology because of the promise it holds for extensive value chain applications. These include industralisation, job creation, localised manufacturing and the potential for SA to become one of the largest exporters of green hydrogen in the world.

South Africa’s high solar radiation levels and large area of coastline for wind deployment creates significant renewable energy potential. Hydrogen can augment renewable energy production by offering a way to store and transport excess energy produced from RE sources.

South Africa also hosts the world’s largest platinum group metal resources which would benefit from the demand brought about by a well-developed hydrogen sector.

Increasing global demand for green hydrogen could contribute to economic growth

Western Cape Finance and Economic Opportunities Minister Mireille Wenger said green hydrogen is emerging decarbonisation solution that would create benefits for the country as a whole. “By working together the Western Cape and Northern Cape are perfectly position to explore the potential of green hydrogen and increasing demand through production, bulk exports, and by attracting foreign direct investment which will contribute to economic growth and job creation in the context of ensuring a just energy transition,” said Wenger.

Wesgro, the Western Cape official tourism, trade and investment promotion agency also welcome the MoU. Wesgro CEO Wrenelle Stander said the world’s attention is on achieving net-zero carbon emissions by 2050, with trillions of dollars being invested into the renewable energy and energy efficiency required to meet the target.

“At this pivotal moment we have a unique opportunity access a large piece of the investment pie. South Africa’s energy crisis has catapulted our capability in the global race for energy transition,” said Stander.