SA should not expect to see green hydrogen included as part of SA’s energy-mix planning just yet, electricity minister Kgosientsho Ramokgopa says.
At the SA Green Hydrogen Summit in Cape Town Ramokgopa said it is "highly unlikely" that the new Integrated Resources Plan (IRP) to be published by the department of mineral resources & energy before the year end to replace the IRP 2019, will include green hydrogen.
The IRP provides a roadmap for SA’s future energy mix by indicating how much energy is to be procured from which technologies over a 10-year period.
Ramokgopa said green hydrogen projects being developed in SA are still in the "very early, prefeasibility stages". In addition, since the aim of the IRP is to identify the potential energy mix to provide energy security at the lowest possible cost, green hydrogen is still expensive compared to other low-carbon fuels, making it unlikely to feature in the 2023 version of the IRP.
While the IRP might not include green hydrogen soon, future iterations of the plan should include the need for renewable energy to be scaled up significantly as a precursor to and enabler for a green hydrogen sector.
This is according to SA’s R1.5-trillion Just Energy Transition Investment Plan (JET-IP) that was launched last year to detail funding needs for the just transition over the five years from 2022 to 2027. It is included as one of three priority areas.
The JET-IP estimates that about R320bn would have to be spent up to 2027 on research and developing the infrastructure needed to support the production, use and export of green hydrogen.
Up to 2050 SA could need as much as 100GW of dedicated renewable electricity capacity to power the green hydrogen sector and this allocation of new renewable electricity capacity will need to be either included in the updated IRP or as part of an associated energy plan for green hydrogen, the JET-IP said.
Jobs
President Cyril Ramaphosa, who delivered the keynote address at the SA Green Hydrogen Summit on Monday, said green hydrogen will play a prominent role in SA’s just transition as the country moves to reduce carbon emissions from its fossil-fuel powered energy and industrial sectors.
"A new green hydrogen economy could add an estimated 3.6% to SA’s GDP by 2050 and create, at a minimum, 370,000 jobs," Ramaphosa said.
Green hydrogen, which uses renewable energy to produce hydrogen from water through electrolysis, is seen as a key enabler to reduce emissions in hard-to-abate sectors such as steel production. Green hydrogen can also be used to produce green ammonia, which can be used as a fertiliser to reduce the carbon footprint of farming.
The Northern and Western Cape already have green hydrogen projects under way at the prefeasibility and feasibility stages. With long coastlines, port infrastructure and abundant natural resources for renewable energy generation, these two provinces along with the Eastern Cape present the greatest potential for the large-scale development of green hydrogen production.
To explore areas of possible collaboration, the three provinces signed a memorandum of understanding (MOU) at the summit. The aim, said Eastern Cape finance & economic development MEC Mlungisi Mvoko is to create linkages that will support local and regional green hydrogen development.
This could include developing shared infrastructure such as transmissions lines.
The province is hoping to develop export capability for green hydrogen at the Coega port and within the Coega Special Economic Zone (SEZ).
Northern Cape finance, economic development & tourism MEC Abraham Vosloo said if green hydrogen can be produced cost-effectively in the Northern Cape it could see the country’s manufacturing capacity migrate to the province.
The Northern Cape launched its green hydrogen master plan at the summit on Monday.
According to the plan the province is targeting an initial 5GW of electrolysis capacity supported by 10GW of renewable energy generation to commence construction in 2026 and to be completed by 2030.
Central to the province’s plans to establish a green hydrogen sector is the development of a port at Boegoebaai, which will give direct access to export markets for green hydrogen.
Sasol, an initiating investor in the Boegoebaai port project, is already actively evaluating the establishment of 4.8GW of electrolyser capacity in the Boegoebaai SEZ and about 10GW of associated renewable energy infrastructure.
Sasol has also signed an memorandum of understanding with Freeport Saldanha to develop a green hydrogen hub and ecosystem.
Ultimately, according to the master plan, the Northern Cape wants to build and operate 40GW of electrolyser capacity by 2050. But achieving this will require investment in the range of $300bn to $500bn to fund renewable energy projects, desalination, storage, and other infrastructure that will be required to produce green hydrogen at this scale.
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