Preparatory work has been done on a R105bn Hive Energy UK hydrogen/ammonia project at the Coega special economic zone (SEZ) outside Gqeberha — said to be the largest such investment in the world.
The project, to be commissioned in 2028, will add 14,400MW to the national grid and create 20,000 jobs. It comes with numerous downstream industries, such as solar-panel manufacturing.
It dovetails with the country's just energy transition programme, announced by minerals & energy minister Gwede Mantashe two years ago at Africa Oil Week in Cape Town, and confirms the Coega SEZ as a renewable energy hub not only for South Africa, but for the entire Southern African Development Community region.
Annually, the project will produce 900,000t of green ammonia, some of which will be exported to Japan, Korea and Europe. The ammonia acts as a storage mechanism for hydrogen, a carbon-free fuel.
A memorandum of association was recently signed between South Africa and Japan in Tokyo. Japanese investors have already conducted their own due diligence to acquire a substantial stake in the project, which will use electrolysers to extract hydrogen from water.
Colin Loubser, who is general manager of Hive Hydrogen South Africa and CEO of Hive Africa, said preparations for the mega project started in 2020, with Hive Energy UK playing the leading role in the development of phase 1.
The quantum leap to green ammonia is phenomenal, and a lot of ports around the world are already setting up green ammonia bunkering, which is offshore refuelling
— Colin Loubser
“We started pre-feasibility [studies] of sites in 2020, business modelling in 2021, and development in 2022. We are progressing well and hope to meet our target of commissioning it in 2028,” he said.
In a sign of hydrogen/ammonia’s growing role, the maritime industry is turning to it as its fuel of choice. Loubser said there were more than 100 ammonia-fuelled cargo ships around the world, with another 15 “very large ammonia carriers” on order.
“The quantum leap to green ammonia is phenomenal, and a lot of ports around the world are already setting up green ammonia bunkering, which is offshore refuelling. Look at what's going on at COP28 — the maritime industry has committed to getting rid of heavy fuel oils and diesel, [and] replacing them with either green ammonia or hydrogen fuel. Japan and Korea, in particular, have committed to converting their coal power stations to green ammonia.”
He said that by combining the latest technology with South Africa's high-yield renewable assets, his company can produce hydrogen for less than $3/kg (about R57), which is the threshold to be competitive. The memorandum of association signed with Japan recognises that South Africa is capable of being an internationally competitive producer of hydrogen and green ammonia.
Ammonia is used as a means to transport hydrogen because it is easier and safer to store and transport over long distances than hydrogen gas. Once ammonia reaches its destination, it can be split into hydrogen and nitrogen, which can then be used as a source of clean energy.
According to the memorandum, Japan will help to facilitate international development funding, research and private sector participation to achieve a sustainable and affordable hydrogen and ammonia supply chain in South Africa.
Hive Energy UK founder and CEO Giles Redpath said his company, founded in 2010, had been working on renewable energy projects in Southern Africa since 2015, and on green hydrogen since 2018.
“It is encouraging to see how the South African government has embraced the new green hydrogen industry. The opportunities this creates will enable our Coega green ammonia project to become the world's leading hub. When the production plant is commissioned in 2028, green ammonia will be shipped from Nelson Mandela Bay to the Far East and across the world.
“Hive Energy is developing eight other green hydrogen ammonia projects globally. Once completed, these projects will have the capacity to produce about 8.5Mt of hydrogen/ammonia each year to support the global drive to net-zero emissions by 2050,” said Redpath.
Hive Energy UK believes its green ammonia pricing for the pre-2030 supply will be among the lowest globally.
Hydrogen is a versatile energy source that has the potential to play a significant role in reducing greenhouse gas emissions and mitigating the impact of climate change.
