SA eyes stake in hydrogen sector

SA set its sights on attracting as much as R4.33-trillion ($250bn) into its nascent green hydrogen industry by 2050 to take advantage of abundant solar and wind energy sources.

The industry could create 1.4million jobs and generate as much as $30bn in annual revenue by that year, according to Masopha Moshoeshoe, a green economy specialist in the presidency’s investment and infrastructure office.

Green hydrogen, made by splitting water using renewable energy, is one of three ways SA is aiming to shift its economy away from a reliance on coal, which accounts for more than 80% of its electricity. The other ways are developing an electric vehicle industry and shifting power production to wind and solar power.

The plan, included in a presentation by Moshoeshoe at the COP27 international climate conference in Egypt on Monday, would involve SA exporting as much as 8-million tonnes of the clean-burning fuel and its derivatives by 2050 and satisfying local demand of 2-million to 5-million tonnes, he said.

While African countries such as Morocco and Namibia have already positioned themselves as potential hydrogen producers, Russia’s invasion of Ukraine has increased interest in supply and created more opportunities for co-operation, he said.

The war has driven up natural gas prices and threatened security of supply. Investment funds, governments and utilities are pledging to spend billions of dollars for the clean fuel.

The potential is for the country to supply 4%-8% of the global market for ammonia, which is produced using hydrogen, with a focus on supplying South Korea and Japan, he said.

Even so, the numbers needed to make the strategy a success are daunting. Between 140,000MW and 300,000MW of renewable power generation capacity would be needed to supply the industry, compared with the country’s current total power facility capacity of little more than 40,000MW, the presentation showed.

By 2030 alone, 6,000MW10,000MW of dedicated renewable energy plants would need to be built to power 3,000MW to 5,000MW of electrolyser capacity, according to figures shown in the presentation. Electrolysers use electricity to make hydrogen from water.

A number of bilateral negotiations are being conducted between SA and potential markets, Moshoeshoe said.