Africa’s early hydrogen industry rests with a handful of countries
Half a dozen countries in Africa have emerged as the most viable options to found the continent’s hydrogen industry.
Related Articles
Developing a new hydrogen economy from scratch needs several factors in place to be successful, including abundant renewable energy resources, wide tracts of available land, a dedicated workforce, an involved government, a trustworthy economy, and a stable rule of law.
Not all African countries can offer all these elements, but those that can are planning, and already building, wide-reaching hydrogen industries that will help decarbonize at home and feed a hungry export market.
“Africa has huge potential to produce hydrogen using its rich renewable resources. A number of low-carbon hydrogen projects are underway or under discussion in Egypt, Mauritania, Morocco, Namibia and South Africa,” according to the International Energy Agency (IEA).
“These are focused primarily on using renewables-based power to produce ammonia for fertilizer, which would strengthen Africa’s food security.”
Internationally competitive prices will also allow Africa to deliver renewables-produced hydrogen to Northern Europe by 2030, it adds.
Three main areas are prime for hydrogen industry development, according to the the European Investment Bank (EIB), including the West African hub, the Egypt hub, and the Southern Africa hub, where it forecasts hydrogen prices could drop as low as 1.55-1.90 euros ($1.69-$2.07) per kilo.
These hubs will create an average of 40 billion euros of direct gross domestic product (GDP) a year for local economies as well as create a massive amount of permanent quality jobs, the EIB said.
Green hydrogen could increase the GDP of Egypt, Kenya, Mauritania, Morocco, Namibia, and South Africa, by $126 billion by 2050, equivalent to 12% of their current GDPs, according to one analysis by the Africa Green Hydrogen Alliance (AGHA).
Estimated potential green H2 demand in 2030 and breakdown by sector (MT/y)
(Click to enlarge)
Source: European Investment Bank
Namibia clean slate
In May, the Government of the Republic of Namibia (GRN) entered into an agreement with Hyphen Hydrogen Energy for the next phase of a $10 billion clean hydrogen project, equivalent to around two-thirds the size of the Southern African country’s annual GDP.
Namibia's relatively underdeveloped energy infrastructure makes it a clean slate for the developer.
Before the end of this decade, the project aims to develop two green ammonia synthesis loops, producing 2 million tons (MT) of clean hydrogen for the domestic and international markets.
This first stage of the project will be a partnership between Hyphen and the government of the Republic of Namibia, aiming to produce one million tons of hydrogen a year by 2027.
“Hyphen will build vessel loading infrastructure, the gas pipelines, the ammonia facility, electricity transmission, wind and solar, electrolyser assets … the entire value chain. This integrated design is very important because a lot of projects are reliant on a third party somewhere in the value chain,” says Hyphen CEO Marco Raffinetti.
“We are effectively a lighthouse project that will de-risk future projects in Namibia in this particular hydrogen valley, because we would have built out a lot of the infrastructure and so it will be a lot simpler for subsequent developers to come after us.”
Namibia has one of the lowest population densities in the world, comparable with countries like Australia at around 3 people per square kilometer, and its population of 2.5 million is mostly found in and around urban centers such as its capital Windhoek.
It is also one of the driest countries in the world, with bright sun an average of 300 days a year, and boasts a constant south-westerly wind along the Atlantic coast.
Large tracts of sunbaked land, mostly owned by the government, and reliable wind make it a perfect location for large scale solar and wind plants.
Meanwhile, the stable government – Namibia has what Raffinetti refers to as “one of the world’s steady democracies” – is good news for long-term energy projects and for bankers looking to finance such projects.
“Namibia does the basics incredibly well. That's what investors enjoy. Very democratic, vibrant free press, very strong constitution, rule of law; those basic fundamentals that are sometimes lacking in some places,” Raffinetti says.
Namibia’s wide income inequality, meanwhile, can be addressed by such projects as it brings thousands of jobs for the unskilled and the highly qualified alike, he says.
Levellized Cost of Hydrogen by delivery point – 2030 and 2035 ($/kgH2)
(Click to enlarge)
Source: European Investment Bank
Up North
Along Africa’s northern Mediterranean coast, sites are set on exports into Europe, which plans to import some 10 MT of hydrogen by 2030 according to its REPower strategy.
African company Gaia Future Energy and European group HyDeal in June launched HyDeal Africa, the first industrial implementation outside Europe of the HyDeal Ambition platform, which will build renewable energy infrastructure for hydrogen production and exports in Morocco and Mauritania.
“HyDeal Ambition is an industry platform bringing 30 companies covering the complete green hydrogen value chain, from upstream to midstream, downstream and finance: renewable power generation, electrolyser manufacturing, project engineering, gas transmission and storage, industrial applications in steel, chemicals and power through project finance financing,” the Gaia Future Energy team said in an emailed response to questions.
Hydeal Africa plans to export a 1 MT of hydrogen to Europe by 2030 and 5 MT in 2035 from multiple renewable sites relying on integrated wind, solar, and energy storage electricity generation, and a total capacity of over 80 GW, the company said.
The gas will be transported through a submarine pipeline network, part of which will take advantage of the planned H2Med Pipeline which aims to link Spain to France and Germany by 2030.
As with Namibia, the countries’ political stability is key, and the group says it already engaged in consultations with European institutions and national governments on both sides of the Mediterranean to foster an environment conducive to the construction of large-scale projects.
By Paul Day