SA eyes green hydrogen opportunities

Tuesday, November 29, 2022

President Cyril Ramaphosa says South Africa’s intention is to become a world leader in green hydrogen.

“We are determined to make full use of our substantial endowments to meet the challenges of climate change and to achieve a just transition that benefits all our people,” the President said.

President Ramaphosa was delivering a keynote address at the opening of the inaugural South Africa Green Hydrogen Summit, held in Cape Town, on Tuesday.

The summit showcases the country’s offering as a large-scale, low cost, world-class green hydrogen production hub and total value chain investment destination.

It builds on the opportunities identified during the Sustainable Infrastructure Development Symposium South Africa (SIDSSA) of 2021. 

The President told delegates at the summit that the potential for South Africa to emerge as a significant player in the green hydrogen value chain is immense. 

The country looks forward to welcoming more of the firms in the green hydrogen value chain and associated technologies into the market. 

“We hope to see these international firms partnering with South African firms as we increase our renewable energy footprint, green hydrogen manufacturing capability and local production of value added products,” he said.

The Green Hydrogen Summit is taking place soon after the conclusion of the UN Climate Change Conference, also known as COP 27, in Sharm el-Sheikh, Egypt. 

President Ramaphosa said South Africa used the platform of COP 27 to elaborate on its just green transition.

Government recently released for public comment a Just Energy Transition Investment Plan as the basis for the country’s pathway towards a low-carbon and climate resilient society. According to the plan, South Africa will need approximately $98 billion over the next five years to enable a just transition and achieve its ambitious emissions reduction targets.

Green hydrogen was identified as a “Big Frontier” in the Country Investment Strategy, indicating that it represents both current and future growth and investment potential for South Africa.

The President highlighted that globally, the demand for green hydrogen and green hydrogen-based products, such as ammonia and synthetic jet fuels, is rising significantly. 

“This presents a unique opportunity for South Africa to link its mineral endowment with its renewable energy endowment to drive industrialisation.

“At the same, it will create jobs, attract investment, bring development to rural provinces and support a just transition from fossil fuels. This Summit is an opportunity to tell the South African story in this rapidly growing sector,” President Ramaphosa said.

SA an investment destination of choice

President Ramaphosa emphasised that South Africa has existing and future potential to produce green hydrogen.

It is estimated that South Africa has the potential to produce 6 to 13 million tons of green hydrogen and derivatives a year by 2050. This would require between 140 and 300 gigawatts of renewable energy. 

The President explained that the focus would be on green hydrogen exports, electrolyser and fuel cell production, and the manufacture of green steel, sustainable aviation fuel, ammonia, fertilizers and renewable energy components. 

“South Africa is an investment destination of choice. The country has proven itself as a gateway to a dynamic continent with great prospects. Africa is growing its output, is rapidly urbanising and has a young population. 

“South Africa leads the continent in advanced manufacturing, science and technology. This country is a favourable, reliable and stable place to conduct business,” the President said.

President Ramaphosa reiterated that government is driving regulatory and legislative reform to make the economy more competitive, to attract more investment and to create more jobs.

“South Africa has many inherent advantages that make it internationally competitive in the production of green hydrogen. These include a world class endowment of both onshore wind and solar irradiation,” the President said.

The country has a supportive legislative environment and experience in the deployment of renewable energy with the largest installed capacity of wind and solar power projects on the African continent.

Companies like Sasol and PetroSA have expertise in the production of synthetic fuels like diesel, petrol and kerosene, as well as a range of chemical products. 

South Africa already produces 2.4 million tons of grey hydrogen for domestic consumption. 

The President highlighted that a number of large and emerging South African companies have started doing work in the green hydrogen sector including the Boegoebaai Port and Rail project, among others.

The project has been under development for over two decades and was gazetted as a Strategic Integrated Project in 2020. 

Sasol and the Northern Cape provincial government have also made significant progress on the master plan for a green hydrogen special economic zone, which aims to support 40 gigawatts of electrolyser capacity by 2050. 

The President said this would require approximately 80 gigawatts of renewable energy, which is almost double South Africa’s current installed electricity generation capacity. –