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Is South Africa ready to profit from green hydrogen?

November 18, 2022 / 2:26 PM
Sharjah24 – Reuters: Green hydrogen has been raising hopes at COP27 and forms a major part of South Africa's plans to transition away from coal - but there are barriers to South Africa benefiting from the renewable energy source.
The sun glinting off solar panels in South Africa is a sign of a potentially brighter energy future for the country, and indeed the wider continent. This facility, in Vredendal, has been set up to prove the concept of producing green hydrogen. That's important because green hydrogen is a central pillar of South Africa's plan to transition away from polluting coal.

But there are question marks over whether Africa's most industrialized nation is ready to profit.

Dr. Stanford Chidziva is the acting director of green hydrogen at the University of the Western Cape's South African Institute for Advanced Materials Chemistry.

It has partnered with a joint venture including Keren Energy to develop the project which, as he explains, uses two electrolizer hydrogen stacks powered by the sun.

"We supply them with pure water, and the process of electrolysis takes place in these two electrolizer stacks. And, when electrolysis happens here, water is split into hydrogen and oxygen."

Though the Vredendal site only produces small amounts of green hydrogen, Keren Energy has plans to upscale the project nearby, says executive director George van Rensburg.

“The commercial plant in Vanrhynsdorp will use about ten megawatts of solar power, solar PV power, to power six to eight megawatts electrolizer, and we will produce roughly about a thousand kilograms of hydrogen per day.”

At COP27, delegates expressed high hopes for the nascent industry.

However, speaking at the climate talks, Egypt's President Abdel Fatah al-Sisi warned that developing countries "remain less able to benefit from the opportunities offered by the rapid green hydrogen transition".

"This is due to developing countries' weak technological capacity in this new field, the lack of necessary infrastructure to transport, store and create the required supply chains for safe trade."

South Africa is not immune from such challenges.

A plan presented at the summit says the country could produce over five million tonnes of green hydrogen by 2040.

But the government also estimates that to realize its vision it will need up to 100 gigawatts of additional solar and wind power capacity at a cost of close to $133 billion.

According to Boston Consultancy Group, South Africa will need to set up 6-7 GW of renewable capacity per year for the next two decades.

That compares with the 6 GW it has managed in total since 2011.

One barrier, says Chris Yelland - managing director and energy analyst at EE Business Intelligence - is the public procurement process.

"It is like a dinosaur in the modern world."

He said the system is mired in bureaucracy and legal challenge.

"But do not think that renewable energy is not happening in South Africa in a big way. But it is not happening through the public procurement process so if we had to look at the domestic, commercial, the light industrial, the heavy industrial, the mining, agricultural sectors, the customers of electricity are taking control of their own future."

South African petrochemicals company Sasol and ArcelorMittal South Africa have announced that they are partnering to explore carbon capture and steel production using green hydrogen.

Sasol is the world's biggest producer of fuel products and chemicals from coal, ArcelorMittal South Africa is the continent's biggest steel producer.

Green hydrogen is one of three prongs in South Africa's transition plan.

The other two are replacing its ageing fleet of coal-fired power stations with wind and solar, and kick-starting an electric vehicle revolution.

Retiring coal though, and its impact on jobs, is a thorny issue.

With President Cyril Ramaphosa under pressure in various ways, Yelland says, the political situation in the country is "on a knife edge".

But if the barriers can be overcome, then South Africa could be heading, in terms of renewable energy, for greener pastures.
 
November 18, 2022 / 2:26 PM

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