26 minute read
ENERGY
THE RACE TO GREEN HYDROGEN IN AFRICA
Hydrogen is an attractive opportunity that could realise a cumulative global investment of USD450-billion by 2030. Countries are shifting away from a dependence on fossil fuels such as coal – a crucial export for South Africa, so the development of our hydrogen economy could be a game changer.
Advertisement
BY FITCH SOLUTIONS
South Africa is home to 75% of the global reserves for platinum group metals (PGMs), which are used in hydrogen and fuel cell technologies. About 40% of PGMs are used in catalytic converters for internal combustion engines (ICEs). The potential decline of ICEs due to climate-related restrictions threatens the existence of this market and the future demand for PGMs. Through the hydrogen economy, South Africa can mitigate this with PGMs in hydrogen fuel-cell vehicles and greenhydrogen production technologies.
Given our share of PGMs and their contribution to the economy (R187.6-billion in 2019) and the dire unemployment situation, it is essential to capitalise on the increased demand for hydrogen applications that require PGM metals. The PGM industry currently employs about 160 000 people, with two to three indirect jobs in other industries for each direct job, resulting in almost 400 000 jobs. The potential for hydrogen to support the growth of our renewable energy industry as an energy-storage solution would also contribute to job creation.
JUST TRANSITION: THE CORE OF FUTURE POLICY
There is a need to ensure inclusive participation in the transition and that substantial benefits of a green economy are shared. The World Resources Institute considers our national dialogue on just transitions one of the most advanced and South Africa was the only one to have included a just transition in its Nationally Determined Contributions (NDCs) in 2015.
In early 2021, the Presidential Climate Change Coordinating Commission was established to coordinate South Africa’s just
transition. The large concentration of coal mining and power generation in Mpumalanga, as well as the potential decline in coal demand in the global market, means the need for a just transition in South Africa is particularly relevant to deal with the potential loss in jobs and economic activity in affected communities. The recent update to the NDCs means that the country must move with speed to respond to the global commitments on emissions reduction.
GREEN HYDROGEN IN AFRICA
South Africa, Morocco and Egypt boast the most diverse and largest industrial bases in Africa and face the most significant pressure to move towards sustainable energy sources for critical value chains. According to ClimateWatch, South Africa accounts for 1.06% of global greenhouse gas emissions, while Nigeria is at 0.73% and Egypt is around 0.6%. Nigeria is among the top 20 largest emitters in the world, the second highest in Africa after South Africa. Morocco and Angola account for 0.16% and 0.25% of global greenhouse gas emissions respectively.
WHY GREEN HYDROGEN?
The proliferation of low-carbon hydrogen across multiple sectors will be key to achieving global climate goals in line with the Paris Agreement and COP26. Green hydrogen is produced from renewable electricity making it the cleanest hydrogen format, unlike the incumbent market leaders, grey and brown hydrogen, which are produced from fossil-fuel based energy. Blue hydrogen is fossil-fuel based but utilises carbon capture and storage (CCS) systems to mitigate the emissions and is also low carbon.
Carbon capture, utilisation, and storage (CCUS) is an emissions technology that involves capturing, transporting and storing greenhouse gases back into the ground.
Kearney believes that South Africa is best positioned to drive the regional energy transition followed by Morocco and Egypt. Other traditional oil and gas producers such as Nigeria and Angola, though lagging, could benefit from leveraging their existing natural resources, infrastructure and human resource capabilities to participate in production and export of hydrogen.
African emissions by source. (Megatonnes of CO2)
Ember's Global Electricity Review 2022 South African emissions by source. (Megatonnes of C02)
SUSTAINABLE INDUSTRIAL DEVELOPMENT
The use of green hydrogen could benefit multiple sectors and for Africa these can be summarised into: Mobility. To fuel maritime transport vessels, aircraft, vehicles and freight trucks. Industry. Used as a fuel for energy-intensive industries such as the production of green steel. The mining, manufacturing and construction sectors will benefit most by green steel. Trade. Several countries in the region possess vast natural resources (natural gas, solar and wind potential) to produce blue and green hydrogen but lack sufficient infrastructure, domestic industrial clusters and regulatory environments to drive higher local use. Some states will look to develop hydrogen technologies and position themselves to become major hydrogen exporters in the short-tomedium term while transforming local industries on a longer-term horizon.
OPERATIONAL CONSIDERATIONS
The openness to foreign investment coupled with good legal environments will be key to attracting private sector participation in hydrogen and renewables. Morocco, Egypt and South Africa are more welcoming to foreign investment and offer stronger incentives for technology and energy industries, relative to Nigeria and Angola. In these states, progressive pro-business investment policies have driven considerable industrialisation and development of renewable energy sources with notable success in public-private partnerships (PPPs) as opposed to Nigeria and Angola. In terms of bureaucracy, South Africa boasts strong contract enforceability and performs better than Egypt, Nigeria and Angola. As seen in Nigeria and Angola, the risk of slow policy reform momentum and the dominance of large stateowned entities in the energy hydrocarbons sectors will negatively affect foreign direct investment into BY 2025… green energy solutions.
LEADERS IN THE AFRICAN RACE
1. South Africa is well-placed to utilise existing natural resources such as wind and solar to produce renewable power for green hydrogen production. The country will most likely attract substantial investor interest in green energy as it is SSA’s most industrialised economy with the largest installed non-hydroelectric renewables capacity base in the region and a strong PPP track record. The presence of platinum, steel, energy and related industries will allow for efficiency gains in the production of green hydrogen. The government plans to launch a hydrogen corridor, which will involve heavy-duty fuel cells for the country’s air, freight and rail network as well as trucks. Regulatory delays and political tensions may deter more risk-averse investors. 2. Morocco and Egypt are well-positioned to export green hydrogen to proximal demand markets, such as Europe. Both country’s nonhydropower renewables sector will continue to attract significant investment through to 2030, with vast untapped solar and wind power potentials proving attractive to investors.
Cost is projected to Hydrogen will be competitive decrease by up to 50% for long-range vehicles for a wide range of applications, such as trucks and taxi making hydrogen competitive fleets. Investments in scaling with other low-carbon up infrastructure, such as alternatives and, in some cases, fuelling stations, will provide even conventional options. long-term gains.
Hydrogen applications including hydrogen boilers, compact cars, and industry heating become competitive
compared to low-carbon
alternatives, as cost of production and distribution continues to fall.
Because of its versatility, a hydrogen production and distribution system at scale will unlock hydrogen’s competitiveness in at least 22 applications, comprising
~15% of global energy
consumption. 1. INVESTMENT 2. REGULATION AND INCENTIVES
3. STIMULATE DEMAND & SUPPLY $70 billion - less than 5% of annual global energy spend - from private and public sources will enable hydrogen to reach scale.
18 countrieshave already developed detailed strategies for deploying hydrogen energy solutions. Increased collaboration can kickstart a productive hydrogen industry.
HYDROGEN COST COMPETITIVENESS
If we strive towards critical tipping points, costs will fall sharply and scale up will increase. For example: moving from 20 to 80% utilisation in distribution and refuelling networks can slash distribution costs by up to 70%.
COVID-19 has forced the world to drastically change course and think beyond the status quo. For recovery efforts to provide long-term value, we need investable solutions that kickstart a cleaner, more resilient world.
The scale-up of hydrogen technologies is one way to pave the road towards this reality.
CLOSER THAN YOU MIGHT THINK
Political and business leaders are now deciding how to reboot economies and will invest heavily in essential sectors such as energy and transport. During this pivotal moment, we have an opportunity to rethink our current systems and make wise choices for the decades to come. Hydrogen is ready to enable a more resilient, clean energy system for the future. Experts show that cost - previously considered a key obstacle for hydrogen - will go down more significantly and quickly than expected.
BY 2030… Scaling up the hydrogen value
chain will be the biggest driver to unlock further cost reductions from 2030 and beyond. Hydrogen
production HOW DO WE GET THERE?
Hydrogen transport and distribution Hydrogen storage
BY 2025…
Hydrogen applications
Cost is projected to Hydrogen will be competitive decrease by up to 50% for long-range vehicles for a wide range of applications, such as trucks and taxi making hydrogen competitive fleets. Investments in scaling with other low-carbon up infrastructure, such as alternatives and, in some cases, fuelling stations, will provide even conventional options. long-term gains.
Hydrogen applications including hydrogen boilers, compact cars, and industry heating become competitive
compared to low-carbon
alternatives, as cost of production and distribution continues to fall.
Because of its versatility, a hydrogen production and distribution system at scale will unlock hydrogen’s competitiveness in at least 22 applications, comprising
~15% of global energy
consumption. 1. INVESTMENT 2. REGULATION AND INCENTIVES
3. STIMULATE DEMAND & SUPPLY $70 billion - less than 5% of annual global energy spend - from private and public sources will enable hydrogen to reach scale.
HYDROGEN COST COMPETITIVENESS
If we strive towards critical tipping points, costs will fall sharply and scale up will increase. For example: moving from 20 to 80% utilisation in distribution and refuelling networks can slash distribution costs by up to 70%.
CLOSER THAN YOU MIGHT THINK
Political and business leaders are now deciding how to reboot economies and will invest heavily in essential sectors such as energy and transport. During this pivotal moment, we have an opportunity to rethink our current systems and make wise choices for the decades to come. Hydrogen is ready to enable a more resilient, clean energy system for the future. Experts show that cost - previously considered a key obstacle for hydrogen - will go down more significantly and quickly than expected.
BY 2030… Scaling up the hydrogen value
chain will be the biggest driver to unlock further cost reductions from 2030 and beyond. Hydrogen
production HOW DO WE GET THERE?
Hydrogen transport and distribution Hydrogen storage
BY 2025…
Hydrogen applications
Cost is projected to Hydrogen will be competitive decrease by up to 50% for long-range vehicles for a wide range of applications, such as trucks and taxi making hydrogen competitive fleets. Investments in scaling with other low-carbon up infrastructure, such as alternatives and, in some cases, fuelling stations, will provide even conventional options. long-term gains.
Hydrogen applications including hydrogen boilers, compact cars, and industry heating become competitive
compared to low-carbon
alternatives, as cost of production and distribution continues to fall.
Because of its versatility, a hydrogen production and distribution system at scale will unlock hydrogen’s competitiveness in at least 22 applications, comprising
~15% of global energy
HYDROGEN COST COMPETITIVENESS
If we strive towards critical tipping points, costs will fall sharply and scale up will increase. For example:
CLOSER THAN YOU MIGHT THINK
Political and business leaders are now deciding how to reboot economies and will invest heavily in essential sectors such as energy and transport. During this pivotal moment, we have an opportunity to rethink our current systems and make wise choices for the decades to come. Hydrogen is ready to enable a more resilient, clean energy system for the future. Experts show that cost - previously considered a key obstacle for hydrogen - will go down more significantly and quickly than expected.
BY 2030… Scaling up the hydrogen value
chain will be the biggest driver to unlock further cost reductions from 2030 and beyond. Hydrogen
production HOW DO WE GET THERE?
Hydrogen transport and distribution Hydrogen storage
BY 2025…
Hydrogen applications
Cost is projected to Hydrogen will be competitive decrease by up to 50% for long-range vehicles for a wide range of applications, such as trucks and taxi making hydrogen competitive fleets. Investments in scaling with other low-carbon up infrastructure, such as alternatives and, in some cases, fuelling stations, will provide even conventional options. long-term gains.
Hydrogen applications including hydrogen boilers, compact cars, and industry heating become competitive
compared to low-carbon
alternatives, as cost of production and distribution continues to fall.
Because of its versatility, a hydrogen production and distribution system at scale will unlock hydrogen’s competitiveness in at least 22 applications, comprising
~15% of global energy
consumption. 1. INVESTMENT 2. REGULATION AND INCENTIVES
3. STIMULATE DEMAND & SUPPLY $70 billion - less than 5% of annual global energy spend - from private and public sources will enable hydrogen to reach scale.
18 countrieshave already developed detailed strategies for deploying hydrogen energy solutions. Increased collaboration can kickstart a productive hydrogen industry.
HYDROGEN COST COMPETITIVENESS
If we strive towards critical tipping points, costs will fall sharply and scale up will increase. For example: moving from 20 to 80% utilisation in distribution and refuelling networks can slash distribution costs by up to 70%.
COVID-19 has forced the world to drastically change course and think beyond the status quo. For recovery efforts to provide long-term value, we need investable solutions that kickstart a cleaner, more resilient world.
The scale-up of hydrogen technologies is one way to pave the road towards this reality. #HYDROGENNOW
CLOSER THAN YOU MIGHT THINK
The COVID-19 crisis has become a defining moment for the global clean energy transition.
Political and business leaders are now deciding how to reboot economies and will invest heavily in essential sectors such as energy and transport. During this pivotal moment, we have an opportunity to rethink our current systems and make wise choices for the decades to come. Hydrogen is ready to enable a more resilient, clean energy system for the future. Experts show that cost - previously considered a key obstacle for hydrogen - will go down more significantly and quickly than expected.
BY 2030… Scaling up the hydrogen value
chain will be the biggest driver to unlock further cost reductions from 2030 and beyond. Hydrogen
production HOW DO WE GET THERE?
READ MORE IN THE FULL REPORT, PATH TO HYDROGEN COMPETITIVENESS: A COST PERSPECTIVE
Hydrogen transport and distribution Hydrogen storage
BY 2025…
Hydrogen applications
Cost is projected to Hydrogen will be competitive decrease by up to 50% for long-range vehicles for a wide range of applications, such as trucks and taxi making hydrogen competitive fleets. Investments in scaling with other low-carbon up infrastructure, such as alternatives and, in some cases, fuelling stations, will provide even conventional options. long-term gains.
Hydrogen applications including hydrogen boilers, compact cars, and industry heating become competitive
compared to low-carbon
alternatives, as cost of production and distribution continues to fall.
Because of its versatility, a hydrogen production and distribution system at scale will unlock hydrogen’s competitiveness in at least 22 applications, comprising
~15% of global energy
consumption. 1. INVESTMENT 2. REGULATION AND INCENTIVES
3. STIMULATE DEMAND & SUPPLY $70 billion - less than 5% of annual global energy spend - from private and public sources will enable hydrogen to reach scale.
18 countrieshave already developed detailed strategies for deploying hydrogen energy solutions. Increased collaboration can kickstart a productive hydrogen industry.
HYDROGEN COST COMPETITIVENESS
If we strive towards critical tipping points, costs will fall sharply and scale up will increase. For example: moving from 20 to 80% utilisation in distribution and refuelling networks can slash distribution costs by up to 70%.
COVID-19 has forced the world to drastically change course and think beyond the status quo. For recovery efforts to provide long-term value, we need investable solutions that kickstart a cleaner, more resilient world.
The scale-up of hydrogen technologies is one way to pave the road towards this reality.
CLOSER THAN YOU MIGHT THINK
Political and business leaders are now deciding how to reboot economies and will invest heavily in essential sectors such as energy and transport. During this pivotal moment, we have an opportunity to rethink our current systems and make wise choices for the decades to come. Hydrogen is ready to enable a more resilient, clean energy system for the future. Experts show that cost - previously considered a key obstacle for hydrogen - will go down more significantly and quickly than expected.
BY 2030… Scaling up the hydrogen value
chain will be the biggest driver to unlock further cost reductions from 2030 and beyond. Hydrogen
production HOW DO WE GET THERE?
Hydrogen transport and distribution Hydrogen storage
BY 2025…
Hydrogen applications
Cost is projected to Hydrogen will be competitive decrease by up to 50% for long-range vehicles for a wide range of applications, such as trucks and taxi making hydrogen competitive fleets. Investments in scaling with other low-carbon up infrastructure, such as alternatives and, in some cases, fuelling stations, will provide even conventional options. long-term gains.
Hydrogen applications including hydrogen boilers, compact cars, and industry heating become competitive
compared to low-carbon
alternatives, as cost of production and distribution continues to fall.
Because of its versatility, a hydrogen production and distribution system at scale will unlock hydrogen’s competitiveness in at least 22 applications, comprising
~15% of global energy
consumption. 1. INVESTMENT 2. REGULATION AND INCENTIVES
3. STIMULATE DEMAND & SUPPLY $70 billion - less than 5% of annual global energy spend - from private and public sources will enable hydrogen to reach scale.
18 countrieshave already developed detailed strategies for deploying hydrogen energy solutions. Increased collaboration can kickstart a productive hydrogen industry.
HYDROGEN COST COMPETITIVENESS
If we strive towards critical tipping points, costs will fall sharply and scale up will increase. For example: moving from 20 to 80% utilisation in distribution and refuelling networks can slash distribution costs by up to 70%.
COVID-19 has forced the world to drastically change course and think beyond the status quo. For recovery efforts to provide long-term value, we need investable solutions that kickstart a cleaner, more resilient world.
The scale-up of hydrogen technologies is one way to pave the road towards this reality. #HYDROGENNOW
CLOSER THAN YOU MIGHT THINK
Political and business leaders are now deciding how to reboot economies and will invest heavily in essential sectors such as energy and transport. During this pivotal moment, we have an opportunity to rethink our current systems and make wise choices for the decades to come. Hydrogen is ready to enable a more resilient, clean energy system for the future. Experts show that cost - previously considered a key obstacle for hydrogen - will go down more significantly and quickly than expected.
BY 2030… Scaling up the hydrogen value
chain will be the biggest driver to unlock further cost reductions from 2030 and beyond. Hydrogen
production HOW DO WE GET THERE?
READ MORE IN THE FULL REPORT, PATH TO HYDROGEN COMPETITIVENESS: A COST PERSPECTIVE
Hydrogen transport and distribution Hydrogen storage
Hydrogen applications BY 2025…
Cost is projected to Hydrogen will be competitive decrease by up to 50% for long-range vehicles for a wide range of applications, such as trucks and taxi making hydrogen competitive fleets. Investments in scaling with other low-carbon up infrastructure, such as alternatives and, in some cases, fuelling stations, will provide even conventional options. long-term gains.
Hydrogen applications including hydrogen boilers, compact cars, and industry heating become competitive
compared to low-carbon
alternatives, as cost of production and distribution continues to fall.
HYDROGEN COST COMPETITIVENESS
Because of its versatility, a hydrogen production and distribution system at scale will unlock hydrogen’s competitiveness in at least 22 applications, comprising
~15% of global energy
consumption.
CLOSER THAN YOU MIGHT THINK
The COVID-19 crisis has become a defining moment for the global clean energy transition.
Political and business leaders are now deciding how to reboot economies and will invest heavily in essential sectors such as energy and transport. During this pivotal moment, we have an opportunity to rethink our current systems and make wise choices for the decades to come. Hydrogen is ready to enable a more resilient, clean energy system for the future. Experts show that cost - previously considered a key obstacle for hydrogen - will go down more significantly and quickly than expected.
BY 2030… Scaling up the hydrogen value
chain will be the biggest driver to unlock further cost reductions from 2030 and beyond. Hydrogen
production HOW DO WE GET THERE?
BY 2025…
Hydrogen applications
Cost is projected to Hydrogen will be competitive decrease by up to 50% for long-range vehicles for a wide range of applications, such as trucks and taxi making hydrogen competitive fleets. Investments in scaling with other low-carbon up infrastructure, such as alternatives and, in some cases, fuelling stations, will provide even conventional options. long-term gains.
Hydrogen applications including hydrogen boilers, compact cars, and industry heating become competitive
compared to low-carbon
alternatives, as cost of production and distribution continues to fall.
Because of its versatility, a hydrogen production and distribution system at scale will unlock hydrogen’s competitiveness in at least 22 applications, comprising
~15% of global energy
consumption. 1. INVESTMENT 2. REGULATION AND INCENTIVES
3. STIMULATE DEMAND & SUPPLY $70 billion - less than 5% of annual global energy spend - from private and public sources will enable hydrogen to reach scale.
18 countrieshave already developed detailed strategies for deploying hydrogen energy solutions. Increased collaboration can kickstart a productive hydrogen industry.
HYDROGEN COST COMPETITIVENESS
If we strive towards critical tipping points, costs will fall sharply and scale up will increase. For example: moving from 20 to 80% utilisation in distribution and refuelling networks can slash distribution costs by up to 70%.
COVID-19 has forced the world to drastically change course and think beyond the status quo. For recovery efforts to provide long-term value, we need investable solutions that kickstart a cleaner, more resilient world.
The scale-up of hydrogen technologies is one way to pave the road towards this reality. #HYDROGENNOW
CLOSER THAN YOU MIGHT THINK
Political and business leaders are now deciding how to reboot economies and will invest heavily in essential sectors such as energy and transport. During this pivotal moment, we have an opportunity to rethink our current systems and make wise choices for the decades to come. Hydrogen is ready to enable a more resilient, clean energy system for the future. Experts show that cost - previously considered a key obstacle for hydrogen - will go down more significantly and quickly than expected.
BY 2030… Scaling up the hydrogen value
chain will be the biggest driver to unlock further cost reductions from 2030 and beyond. Hydrogen
production HOW DO WE GET THERE?
READ MORE IN THE FULL REPORT, PATH TO HYDROGEN COMPETITIVENESS: A COST PERSPECTIVE
Hydrogen transport and distribution Hydrogen storage
BY 2025…
Hydrogen applications
Cost is projected to Hydrogen will be competitive decrease by up to 50% for long-range vehicles for a wide range of applications, such as trucks and taxi making hydrogen competitive fleets. Investments in scaling with other low-carbon up infrastructure, such as alternatives and, in some cases, fuelling stations, will provide even conventional options. long-term gains.
Hydrogen applications including hydrogen boilers, compact cars, and industry heating become competitive
compared to low-carbon
alternatives, as cost of production and distribution continues to fall.
Because of its versatility, a hydrogen production and distribution system at scale will unlock hydrogen’s competitiveness in at least 22 applications, comprising
~15% of global energy
consumption. 1. INVESTMENT 2. REGULATION AND INCENTIVES
3. STIMULATE DEMAND & SUPPLY $70 billion - less than 5% of annual global energy spend - from private and public sources will enable hydrogen to reach scale.
18 countrieshave already developed detailed strategies for deploying hydrogen energy solutions. Increased collaboration can kickstart a productive hydrogen industry.
HYDROGEN COST COMPETITIVENESS
If we strive towards critical tipping points, costs will fall sharply and scale up will increase. For example: moving from 20 to 80% utilisation in distribution and refuelling networks can slash distribution costs by up to 70%.
COVID-19 has forced the world to drastically change course and think beyond the status quo. For recovery efforts to provide long-term value, we need investable solutions that kickstart a cleaner, more resilient world.
The scale-up of hydrogen technologies is one way to pave the road towards this reality. #HYDROGENNOW
CLOSER THAN YOU MIGHT THINK
The COVID-19 crisis has become a defining moment for the global clean energy transition.
Political and business leaders are now deciding how to reboot economies and will invest heavily in essential sectors such as energy and transport. During this pivotal moment, we have an opportunity to rethink our current systems and make wise choices for the decades to come. Hydrogen is ready to enable a more resilient, clean energy system for the future. Experts show that cost - previously considered a key obstacle for hydrogen - will go down more significantly and quickly than expected.
BY 2030… Scaling up the hydrogen value
chain will be the biggest driver to unlock further cost reductions from 2030 and beyond. Hydrogen
production HOW DO WE GET THERE?
READ MORE IN THE FULL REPORT, PATH TO HYDROGEN COMPETITIVENESS: A COST PERSPECTIVE
Hydrogen transport and distribution Hydrogen storage
Hydrogen Council
Hydrogen applications
Egypt outperforms Morocco due to a comparatively higher green hydrogen high-rewards profile underpinned by a strong demand outlook, despite higher project and legal risks. Rising competitiveness and falling costs have made solar and wind power Egypt’s cheapest source of electricity. This will contribute greatly towards the country becoming a regional electricity and green hydrogen export hub. 3. Angola and Nigeria’s development of non-hydropower renewables capacity has been limited due to continued project delays and regulatory hurdles. Investors are wary of burdensome legal and foreign currency repatriation risks, given the long-term and capital-intensive requirements of green energy investments.
Nigeria is mostly likely to rise in the rankings by 2030. Future demand variables are key factors for the country, and it is expected to lead the region in road freight capacity and dry natural gas consumption, while being second in SSA (behind South Africa) in terms of crude steel production. Nigeria has the largest gas-fired power generation capacity in SSA; which points to the potential for blending hydrogen with gas to reduce emissions from the power sector going forward.
BARRIERS TO PRODUCTION OF HYDROGEN
There are numerous challenges preventing SSA markets from developing industrial-scale hydrogen production operations, broadly stemming from the pervasive lack of economic, political and electricity security across most markets. There are three key aspects limiting the region’s capacity to develop its hydrogen production sector at present namely: inadequate renewables electricity supply and constraints in access to freshwater; lack of existing related utilities and transport infrastructure and human capital and sluggish renewables uptake preventing the build-out of green hydrogen industry. Given the high costs of storing and transporting hydrogen, Egypt and Morocco’s proximity to European markets hold strong export potential in the future. Transport logistics. The low volumetric energy density of hydrogen (in both compressed gas and liquid forms) makes the storage of hydrogen challenging. This limitation is felt most strongly in onboard storage, but it is also a risk in the delivery and distribution of hydrogen. A number of chemical, solid state and other approaches (that could lead to higher stored energy density) can be used in countries to manage the use and, primarily, transportation of hydrogen from point-of-production to point-of-use through pipelines, roads and shipping networks. Expertise needed to enable production. Growth in the hydrogen and fuel cell industries will lead to new demand for workers in these sectors. Many of these jobs do not currently exist or have occupational titles defined in official classifications. They will require different skills than current jobs and training requirements must be assessed so that this rapidly growing part of the economy has a sufficient supply of qualified workers. The most critical skills are likely to be those from technical workers.
South Africa, Egypt and Morocco have strong levels of skills availability by regional standards, particularly for mid-entry level roles, but will likely need to import workers for more specialised roles. Businesses need to be mindful of the barriers to importing foreign workers and the added complications in obtaining the necessary permit documents. Key policy risk areas. When it comes to local use of hydrogen, Kearney believes that African countries including its largest economies will face numerous challenges in producing, storing and trading green hydrogen. From a policy perspective, according to the International Renewable Energy Agency (IRENA), countries need certain key pillars for clean hydrogen development: • A cohesive national or regional strategy (as seen in the EU,
Japan and Australia). Countries will also have to develop robust industrial policies across the value chain, particularly for heavy industries and boost PPPs in renewable energy development. • Adequate research and development programmes and plans to boost expertise. • For hydrogen trade to occur successfully, coherent regulations are necessary in both the clean hydrogen origin and destination countries, and policy areas need to be clear and consistent.
Additional incentives will be needed to entice various stakeholders to commit to longer-term purchase agreements of green hydrogen. • Because the molecules of hydrogen are identical, regardless of the method of production, a certification system or guarantee of origin is needed for end users to know the origin and sustainable nature of the hydrogen production process for each delivery.
Several countries have already initiated certification schemes, such as the EU’s CertifHy and Australia’s Hydrogen Certification
Scheme; however, for international trade it is vital to ensure that these standards are compatible with domestic processes.
www.fitchsolutions.com
The above article is an excerpt from a Fitch Solutions report Low Carbon Hydrogen Global Pathways to Multi-Sector Opportunities published in December 2021.
THOUGHT [ECO]NOMY
READ REPORT
greeneconomy/report recycle HYDROGEN SOCIETY ROADMAP FOR SOUTH AFRICA 2021 | Department of Science and Innovation [2021]
The race is on for countries with a comparative resource advantage to demonstrate the production of green hydrogen for export, at scale and at competitive prices. The projected growth of demand for green hydrogen over the next 10 to 30 years offers an attractive growth area as the world shifts from carbon-intensive to zero-carbon emission economies and industrial sectors; the emerging zero- or low-carbon hydrogen-energy system’s momentum is rapidly growing.
Cabinet approved the Hydrogen South Africa Strategy (HySA) in 2007, so South Africa today is well-poised to leverage the hydrogen opportunity at the centre of our economic growth and development strategies, as well as part of our mitigation strategy for climate change through greening our economy and society.
The Hydrogen Society Roadmap is one of government’s strategies aimed at bringing together a variety of stakeholders (both public and private) around a common vision on how to use and deploy hydrogen and related technologies as part of our economic development and greening objectives. This roadmap has the potential of placing South Africa as an important player, participant and scientific thought leader in the emerging global hydrogen system.
