Latest news with #HydrogenSouthAfrica
Mail & Guardian
26-06-2025
- Business
- Mail & Guardian
The rise and roadblocks of South Africa's green hydrogen economy
Green hydrogen is hydrogen gas made from renewable energy sources such as solar or wind power. (File photo) Africa is uniquely positioned to become a major player in President Cyril Ramaphosa stated this in his Green hydrogen is hydrogen gas made from renewable energy sources such as solar or wind power. It is 'green' because its production does not create pollution or carbon emissions, unlike other types of hydrogen produced from fossil fuels. According to Ramaphosa, green hydrogen is a way to 'marry our continent's mineral riches with our renewable energy endowments' to decarbonise particularly heavy industries, to create jobs, to stimulate investment and to unlock inclusive growth across the various borders. However, While the government continues to tout the economic potential of green hydrogen, including job creation, industrialisation and GDP growth, the coalition said that community organisations want full transparency, proper consultation and evidence of tangible benefits on the ground. In his speech, Ramaphosa noted that there are more than 52 large-scale green hydrogen projects that have been launched across Africa. To date, South Africa has invested more than R1.5 billion into its Hydrogen South Africa programme. A These include the cost factor, capital intensity and the high costs of financing relative to other energy sources, such as natural gas. H2Watch said that, in 2023, civil society had tabled its 'However, fears such as redirection from communities of water resources, displacement, destruction of marine life, environmental harm, lack of consultation and public resources being funnelled into risky, export-driven projects loomed larger.' After the release of the 'Over the last few years, we have seen the green hydrogen bubble bursting, both here and abroad,' noted Fatima Vally, the director of programmes with Vally said that a number of the green hydrogen developments that former minister of public works Patricia de Lille designated as special infrastructure projects in December 2022 'have either stalled or been paused'. H2Watch said that in an April 2024 letter to Macua, AngloAmerican indicated that 'a decision was made to demobilise the In July last year, the developer Enertrag, that was to establish an Mail & Guardian's enquiries. H2Watch said that, in an email response in March, a Sasol official reportedly stated that while green hydrogen 'represents a credible and potentially lucrative industrial horizon for South Africa in coming decades (particularly as a mid-horizon export sector and as a long-horizon replacement for gas), green H2 will not be imminently economical and will not solve our near-term transition challenge'. Matebello Motloung, Sasol's group media relations manager, told the M&G that it continued to view green hydrogen as a 'compelling, long-term opportunity for South Africa, essential both for sustainable industrialisation and for positioning the country as a global clean energy leader'. 'Our abundant renewable energy potential supports this vision. However, while we affirm that the narrative is correct, success depends fundamentally on timing.' The commercial-scale viability of most green-hydrogen applications is still several years away, Motloung said. 'That said, Sasol is taking deliberate steps — responsibly scaling up for when market, technology and regulatory conditions align, balancing carbon reduction with economic growth and shareholder value. 'A clear example is our Sasolburg facility, which is demonstrating renewables-powered electrolysis and low-emission hydrogen production at scale. This facility is laying the groundwork for a broader domestic green hydrogen economy.' Sasol remains firmly committed to green hydrogen, viewing it as a strategic, longer-term mission. 'We are pragmatic, recognising that full-scale, commercially viable deployment is some years ahead. We are investing now, with Sasolburg serving as a proof-point, and will continue to build the ecosystem. And we will scale in line with customer requirements.' According to the coalition, green hydrogen projects are stalling and not coming on stream. 'Unfortunately, government ministers and President Cyril Ramaphosa speak glowingly about green hydrogen projects, giving an impression that the developments are going ahead,' Vally said. 'Stonewalling and revelations that the projects were no longer proceeding is the response that community organisations that are part of … H2Watch have received when they enquired — away from the glare of the media — on what was happening in their localities.' The 'fragility' of South Africa's green hydrogen vision reflects global developments in the sector, H2Watch said. In Europe and Australia, green hydrogen projects have been delayed or scaled back due to high costs, weak demand and uncertain returns. Only about 10% of projects worldwide have reached a final investment decision. 'In China, electrolyser production is being cut due to oversupply and low market demand, raising doubts about the sector's near-term viability,' it said, noting that electrolysers are critical devices used to split water into hydrogen and oxygen using electricity. The coalition maintained that unless corrected, the green hydrogen push threatens to replicate extractive, exclusionary development models witnessed in mining and large-scale renewable energy projects. Special economic zones — 'Worse still, civil society warns that South Africa may take on significant public debt to bankroll speculative projects that might never materialise. H2Watch is concerned that project announcements are always loud, yet the details — especially those affecting people's land, water and livelihoods — are not discussed openly.'
Daily Maverick
12-06-2025
- Business
- Daily Maverick
Ramaphosa extols green hydrogen as future driver of Africa-wide growth
President Ramaphosa on Thursday championed green hydrogen as Africa's future, but can the continent's ambitious dream overcome the reality of prohibitive costs and a risk-averse international financial regimen? 'Africa is uniquely positioned to become a major player in green hydrogen because it has abundant renewable resources that manifest themselves in high solar irradiation, strong winds and hydropower potential,' said President Cyril Ramaphosa. He was speaking at what was once called the South Africa Green Hydrogen Summit, now positioned as the Africa Green Hydrogen Summit, in Cape Town on Thursday. 'The vast land of our continent lends itself to large-scale renewable energy projects. We are therefore perfectly placed to leverage the global shift towards cleaner energy sources for our collective advantage as the entire continent. 'Green hydrogen is a way to marry our continent's mineral riches with our renewable energy endowments to decarbonise particularly heavy industries, to create jobs, to stimulate investment and to unlock inclusive growth across the various borders,' said Ramaphosa. Green hydrogen is produced by using renewable energy sources such as wind or solar power to split water into hydrogen and oxygen through a process called electrolysis. This hydrogen can then be used as an emission-free energy source and carrier for applications such as fuel cells or industrial processes, and is seen as being key to decarbonising 'hard-to-abate' or 'hard-to-electrify' sectors such as long-haul transport, chemicals, and iron and steel. Green hydrogen is of particular interest in South Africa because of the country's strategic advantages. The independent non-profit economic research institution Trade & Industrial Policy Strategies says that 'South Africa's rich endowment of ideal weather conditions for solar and wind-power generation, technological capabilities around the Fischer-Tropsch process, and access to platinum resources place the country at an advantage for developing the hydrogen value chain and being a key supplier into the global hydrogen market.' Ramaphosa noted that more than 52 large-scale green hydrogen projects had been launched across the continent, including in South Africa. 'To date, South Africa has invested more than R1.5-billion in our Hydrogen South Africa programme,' he said. Yet despite the President's bullishness, the reality of green hydrogen projects in South Africa and beyond paints a more complex picture. Daily Maverick reported in April that Namibia's HyIron Oshivela plant successfully produced green hydrogen for the first time, giving South Africa's neighbour to the northwest the lead in its implementation of its green hydrogen-related plans. South Africa's Hydrogen Society Roadmap, adopted in 2021, outlines an ambitious vision. While the initiative — which includes plans for a Hydrogen Valley industrial cluster and the Boegoebaai project in the Northern Cape — is substantial on paper, its implementation has lagged significantly behind Namibia's. Pilot project A pilot project in Sasolburg is producing green hydrogen for domestic use, and the Koega green ammonia project in the Eastern Cape is 'at an advanced planning stage' for four additional flagship hydrogen projects, said Ramaphosa on Thursday. Beyond suboptimal implementation, there are also complications, which Ramaphosa duly acknowledged. Chief among them: cost. 'We are very much alive to the reality that green hydrogen production faces a number of challenges. There is the cost factor. Capital intensity and the high costs of financing are significant barriers, as is the cost of green hydrogen relative to other energy sources such as natural gas, for instance,' he said. Earlier this year, Daily Maverick was told that the ambitious plan to produce 'green steel' in the Freeport Saldanha industrial zone had been shelved, with Sasol and ArcelorMittal citing high costs and shifting priorities. Globally, the steel industry is responsible for roughly 2.6 billion tonnes of carbon dioxide emissions a year, which is about 8% of global emissions. When the conventional coal-fired blast furnaces are replaced with ones that run on carbon emission-free green hydrogen, the steel that is produced is, accordingly, considered green steel. The difficulties in realising green hydrogen projects are shared internationally. A study published in the journal Nature Energy earlier this year, which tracked 190 projects over three years, found that by 2023 only 7% of the announced green hydrogen production globally had been realised. A large part of the reason is renewable energy and electrolyser costs. Lack of competitiveness A Potsdam Institute for Climate Impact Research researcher and the lead author of that study, Adrian Odenweller, as well as co-author Falko Ueckerdt, said: 'Green hydrogen will continue to have difficulties meeting the high expectations in the future due to a lack of competitiveness.' The Just Energy Transition Project Management Unit in the Presidency and the Industrial Development Corporation of South Africa previously confirmed as much with Daily Maverick, explaining: 'Currently, grey hydrogen (from steam reformation of methane gas) costs $1.50/kg to produce. Green hydrogen produced via electrolysis of water using renewables-generated electricity costs $5 to $6/kg. Approximately 60% of this cost is for electricity, 30% for electrolysers and 10% for transport, storage and other externalities. 'So, a reduction in price depends very much on renewable electricity generating costs falling still further. Additionally, the appropriate pricing of carbon taxes is another factor that will contribute to project viability. 'The costs of green electricity and of electrolysers will reduce, but not overnight. Furthermore, penalties in key global markets on goods produced using non-green technologies are ramping up over the next decade. We can anticipate that the right price point will be reached within the next few years. 'Based on the downward price trajectory of renewable energy and electrolyser costs, it has been projected that South Africa will reach $1.50/kg by 2037.' Speaking at the summit on Thursday, Energy and Electricity Minister Dr Kgosientsho Ramokgopa said, 'Africa's choice is whether to be a passive site of resource extraction or a proactive architect of the green energy economy. 'With the right policy framework, investment enablers and regional coordination, green hydrogen can and must be [the] backbone of a new African industrial era. 'South Africa's approach to green hydrogen is not aspirational, it is deliberate, structured and already under way. As a country, we have a clear choice to develop hydrogen not just as a climate response but as a catalyst for reindustrialisation, economic transformation, regional competitiveness and energy sovereignty,' said Ramokgopa. DM
