How hydrogen is emerging as the key to South Africa’s cleaner, greener energy landscape.
The just transition to green energy was a key feature of Cyril Ramaphosa’s February 2022 State of the Nation Address, with the president pointing to South Africa’s “unique opportunity” in green hydrogen, given the country’s “world-class solar and wind resources and local technology and expertise”. Just three months later, Ramaphosa saw that opportunity being realised.
In May, Anglo American unveiled a world-first mine haul truck that carries its 290-tonne payload using hydrogen power. The vehicle, which was converted from diesel to hydrogen, is also partly powered by lithium-ion batteries.
“What we are launching here today is not merely an impressive piece of machinery,” Ramaphosa said at the launch event. “It is the genesis of an entire ecosystem, powered by hydrogen. Developing the hydrogen economy is a strategic priority for our country. Not only will it be a valuable driver of economic growth and employment, it will also contribute to our decarbonisation efforts.”
President Ramaphosa added: “The proposed hydrogen valley, stretching from Limpopo to Gauteng to KwaZulu-Natal, will position South Africa as a global centre for green hydrogen production.”
Green hydrogen is produced by using renewable energy sources to split water (H₂O) into hydrogen (H) and oxygen (O) using electrolysers. It delivers three times more energy per unit than fossil fuels, and the product and its derivatives can power mining vehicles, buses, trains and aircraft, or be used to produce steel and other metals sustainably.
As the International Renewable Energy Agency (Irena) puts it: “Hydrogen is an essential component of a net zero energy system and has a key role to play in decarbonising sectors that are difficult to electrify, such as heavy industry and long-haul transport.” Irena claims that “vast green hydrogen potential exists around the world”, equating to more than 20 times the projected global primary energy demand in 2050.
Speaking at a webinar hosted jointly by EE Business Intelligence and the EU Delegation to South Africa, Boston Consulting Group’s Kesh Mudaly said that South Africa has the solar, wind and land resources to produce more than six million tonnes of green hydrogen per annum by 2050.
But to achieve this, he warned, “We need 130 gigawatts, more or less, of dedicated renewable energy capacity.” That’s more than three times Eskom’s current capacity. It would also need a 60GW electrolyser fleet, which would consume 57 gigalitres of mostly desalinated water every year.
The South African Hydrogen Valley report, however, concludes that a hydrogen economy could add between $3.9 billion and $8.8 billion (about R66 billion to R151 billion) to South Africa’s gross domestic product by 2050, creating between 14,000 and 30,000 jobs per year across the value chain.
Enabling a just transition
Afrox and UK-based Hive Hydrogen recently confirmed plans to develop a new green ammonia plant by 2025 in Nelson Mandela Bay, with a pre-feasibility study into the $4.6 billion (R79 billion) enterprise already under way. Green hydrogen is used to produce green ammonia, which can be used as a fuel source or converted back to hydrogen.
Mudaly’s presentation highlighted several projects currently being pursued elsewhere across sectors, including Anglo American’s project, Gautrain’s proposed rollout of hydrogen and electric hybrid buses, Vodacom’s fuel cell deployment at off-grid base sites and Sasol’s recent memorandum of agreement (MOA) with the Northern Cape Economic Development Trade and Investment Promotion Agency to lead a feasibility study for a green hydrogen development at Boegoebaai in the Northern Cape.
In a statement announcing the MOA, Sasol’s executive vice-president for energy business, Priscillah Mabelane, called the project “a tangible step forward for Sasol, as we seek to play a leading role in establishing the southern Africa green hydrogen economy.
“We believe that southern Africa is well positioned to play in the global green hydrogen economy due to key structural advantages,” Mabelane added. “The project has the potential to provide a significant number of long-term sustainable jobs, infrastructure investment and skills development in the country, enabling a just transition.”
The opinions and views expressed by the industry experts are their own and do not necessarily reflect those of Old Mutual.