Embracing green hydrogen to power Africa’s green growth

For a continent that contributes less than four percent of global greenhouse emissions and has made incremental strides towards renewables, the question of reducing carbon emissions may feel a little bit misplaced. Rather many African countries are shifting the conversation now towards how they can continue sustainably exploring untapped resources to meet growing energy demands for economic development and address inequalities.

This paradigm has ignited interest in green hydrogen production. Studies indicate that Africa has the potential to produce 30-60 million tonnes per annum of green hydrogen by 2050 while creating 3.7 million new jobs and boosting the continent’s GDP by as much as $60 billion to $120 billion. Therefore, many countries are pushing hard to be at the forefront, led by the Africa Green Hydrogen Alliance (AGHA), which estimates that global demand for green hydrogen could rise by 607 million tonnes by 2050.

In 2021, Namibia announced a $9.4 billion green hydrogen project, scheduled to begin production in 2026 and generate 2GW of clean energy for domestic and regional markets. Similarly, Egypt, Morocco, Mauritania, South Africa, and Djibouti are at various stages of developing plans to integrate green hydrogen into their energy grids.

For the first time, Africa is on the starting line alongside developed countries in the global race to generate green hydrogen. According to Consultancy Accenture, the United States has a hydrogen roadmap. Britain plans to spend $16.6 billion, while Germany and Japan put forward figures of $10.6 billion and $3 billion respectively. Even China – currently the world’s leading producer of green hydrogen – has plans to further invest $16 billion in the next two years.

So, what is green hydrogen and why does it matter?

The use of hydrogen as a fuel is not a novel concept. The gas releases a significant amount of energy when used as fuel, almost three times what can be obtained from diesel or gasoline. Hence, it is currently widely used in different applications such as fuel for cars, treating metals, processing food, producing fertilizers, and refining petroleum. Until the Hindenburg disaster in 1922, airships were powered by hydrogen, which enabled them to gain altitude and fly at faster speeds.

Hydrogen is produced by splitting water through a chemical process described as electrolysis. The process uses electricity, conducting fluid, and a metal catalyst – often platinum – in a fuel cell and breaks down water into hydrogen and oxygen atoms. The hydrogen released can be directly used as fuel or mixed with oxygen to create oxyhydrogen used in welding industries and inhalation therapies for respiratory diseases. What makes the energy produced sustainable is that the process does not release carbon or any other greenhouse gasses. 

Given the continent’s access to some of the world’s cheapest renewable energy, at a time when the cost of electrolyzers is dropping rapidly, African countries have a huge opportunity to chuck a significant share of the market. “Solar photovoltaic technology has provided us with the cheapest electricity. Green hydrogen will cost below €2 per kg in several African countries by 2030, much lower than the current mass assumption of €5 and a stark contrast to the $60-$70 (€55-€65) paid for an oil barrel,” said Ajay Mathur, director general of the International Solar Alliance (ISA) in a December 2022 report on the sector.

“For many industrial sectors and organizations, green hydrogen is the only path to sustainability,” says Donal Cannon, from the non-EU advisory team of the European Investment Bank (EIB), which helped produce the same report commissioned by the European Investment Bank, the ISA, and the African Union. It is boldly titled “Africa’s Extraordinary Green Hydrogen Potential” and suggests that the industry could bring €1 trillion of investment to Africa and that the continent could be producing 50 million tonnes of green hydrogen a year by 2035.

But overall progress has remained sluggish. Rystad, an energy research consultancy, estimates that so far only 13 MW of the planned 114 GW of green hydrogen electrolysis capacity on its African database has reached a final investment decision by March 2023. 

Planned Investments

Unsurprisingly, countries leading the development of renewables are also the main centers where investment has begun flowing. Mauritania is set to host Africa’s largest green hydrogen project – the $40 billion Aman project currently developed by investment firm CWP Global. Once finished, the plant will have a 15 GW electrolyzer capacity, powered by 18 GW of wind and 12 GW of solar capacity, all readily available in the West African country. Another project called Nour is being developed by UK firms Chariot and Total Eren, and once completed could reach 10 GW electrolyzer capacity. 

Meanwhile, Egypt has 21 hydrogen-related projects lined up for development, as part of its national plan to reduce reliance on natural gas to meet energy needs. The Aik Sokhna plant in the Suez Canal Economic Zone (SCEZ) is described as Africa’s first integrated green hydrogen plant, which when fully developed will consist of 100 MW of electrolyzers, powered by 260 MW of solar and wind energy. The facility targets to supply 15,000 tonnes of green hydrogen for the production of up to 90,000 tonnes of ammonia at fertilizer plants operated by Fertiglobe. 

Furthermore, in March 2022, Norwegian firm Scatec agreed on a deal with the Egyptian government to build a $5 billion green ammonia plant in the SCEZ with a production capacity of roughly 3 million tonnes annually. 

Morocco is also taking strides in this race, seeking to leverage its proximity to a European subcontinent frantically looking to wean itself of Russian gas. The Amun plant, being developed by Bechtel and CWP Global, is estimated to produce 900,000 tonnes of hydrogen annually. 

Aside from the North African countries, other developments are focused in the South. Namibia is well on its way to becoming a green hydrogen economy with key projects such as the Tsau Khaeb with a production capacity of 300,000 tonnes per annum for $9.4 billion, as well as the 2.5 GW Tumoneni project, the 42 MW Daures Green Hydrogen Village and the 50 MW Swakopmund project.

South Africa, which already has a thriving nuclear power industry, is also well-positioned to become a green hydrogen powerhouse. Key projects include a Green Ammonia plant with a production capacity of 780,000 tonnes, developed by Hive Hydrogen at $4.6 billion, and a $16.4 million subsidy from Germany for the HySHiFT renewable hydrogen project.

Challenges lurk

Despite the potential of green hydrogen, numerous obstacles that could derail those projections lie ahead. Right now, access to energy in sub-Saharan Africa is the lowest in the world. More than 50% of the population lives without electricity. Yet green hydrogen production is energy intensive.

The Corporate Europe Observatory, a Brussels-based nongovernmental organization, argued in its May 2022 report that if the EU’s hydrogen investment plans in Africa are implemented, “they will represent the latest neocolonial resource grab, at a time when renewable resources should be used for local energy needs and climate targets.”

Access to water is also a major challenge. Many African countries are currently battling water scarcity, and the idea of using limited water resources for green hydrogen production could spark unrest from already deprived populations. One solution for this is to incorporate desalination plants, but that comes with the challenge of cost.

And yes, cost is a very BIG factor in play here. Considering that developed nations have failed to meet their pledges to provide developing nations with $100 billion for energy transition – as outlined in the Paris Agreement 2015 – it is hard to see how they can therefore sponsor the more expensive green hydrogen plants.

According to the Africa Green Hydrogen Alliance (AGHA), its six member states – Egypt, Kenya, Mauritania, Morocco, Namibia, and South Africa – would require between $450 billion and $900 billion of investment by 2050 to create a green hydrogen economy. Those figures do not even include building transmission lines, pipelines, and storage facilities for the energy grid.

As COP28 becomes a larger object in the rearview mirror, it’s pertinent that the continent keeps on pushing for more investment into renewables. With proper planning and government action, green hydrogen can provide millions of Africans access to affordable green energy.

Citations
European Investment Bank press release. New study confirms €1trillion Africa’s extraordinary green hydrogen potential. EIB. Retrieved June 7, 2023, from
https://www.eib.org/en/press/all/2022-574-new-study-confirms-eur-1-trillion-africa-s-extraordinary-green-hydrogen-potential

AbouSeada, Nour, and Tarek M. Hatem. Climate action: Prospects of green hydrogen in Africa. Energy Reports 8 (2022): 3873-3890.

Solomon Agbo, Green Hydrogen for Africa – Potentials, opportunities, and challenges. H2Atlas. Retrieved June 7, 2023, from
https://www.uneca.org/sites/default/files/ACPC/CCDA9/pre events/Green%20Hydrogen%20for%20Africa-Potentials%2C%20opportunities%20and%20challenges%20-%20Solomon%20Agbo.pdf
Bhagwat, Swetha, and Maria Olczak. Green hydrogen: bridging the energy transition in Africa and Europe. European University Institute, (2020).