- An increasing number of investors across the globe are angling for a pie of Africa’s $1 trillion hydrogen supply potential.
- By 2050, analysts project that green hydrogen could increase the GDP of six African countries including Egypt, Namibia, Mauritania, Morocco, and South Africa by $126 billion.
- In 2021, the government of Namibia announced the rollout of a green hydrogen project worth an estimated $9.4 billion.
Africa has experienced several energy transitions throughout the past few decades, from coal-powered energy to the massive adoption of electricity that still powers many industries today.
But as the continent enters a new age of renewable energy, Africa’s steady adoption of green hydrogen, a new offering in renewable energy mix has the potential to accelerate the continent’s move into energy independence.
Currently, Africa’s hydrogen supply is estimated at $1 trillion industry and an increasing number of organizations have flooded the market, trying to gain a piece of this lucrative segment.
To understand the value of green hydrogen energy, we must first elaborate on its parent components, the hydrogen molecule. In today’s industrialized world, most chemicals formulate essential elements we use daily. For starters, coal is one of the first energy transitions to occur in the world. Scientists at the time determined that coal could kick off the world’s first wave of technological revolution.
Years later, natural gases came to produce various forms of energy, and also brought electricity. Through the years, developers and scientists have tinkered with other chemicals to unlock their potential usefulness towards society, and green energy is among such revolutionary thinking.
Hydrogen is the most abundant chemical element in nature. Due to its constant supply, the global demand for it has tripled since 1975 hitting 70 million tonnes by 2018. The hydrogen gas has been used to fuel cars, airships and spaceships since the beginning of the 19th century.
Unfortunately, throughout the years, carbon emission from other energy sources has degraded the planet’s environmental health prompting authorities and governments to look for renewable energy.
When we talk about green hydrogen, we merely mean hydrogen obtained without generating pollutant emissions. It is a clean, renewable energy source that only emits water vapour and leaves no residue, unlike coal and oil.
This new form of energy is produced through electrolysis and the intervention of other renewable sources. Due to its clean state, many emission reduction pledges have featured green hydrogen. According to the UN Climate Conference, C0P-26, green hydrogen energy is among the main factors that will lead to the decarbonization of the world.
Recognition of green energy
As the decarbonization of the world movement is steadily gaining more supporters, industries have been pushed to also comply with the energy transition the world is undergoing. One of the primary goals of the UN and the World Bank is to develop an energy system that will result in little or no carbon footprint.
Green energy from hydrogen is emerging as ideal fuel alongside solar and wind energy.
Companies and multiple organizations have jolted to this new energy source. Shell Nederland confirmed that it would join forces with Eneco, an energy company, to establish a Dutch offshore wind tender. This partnership plans to create one of the Netherlands’ most significant clean hydrogen clusters. The hydrogen production market is valued at $155.35 billion and can gain a compound annual growth rate of 9.3 percent from 2023 to 2030.
Currently, the World Bank is heavily supporting renewable energy sources by providing financial aid to companies willing to invest in green hydrogen energy. Countries such as Chile, Colombia, Cosa Rica, Panama and Brazil have already established strong relations with the World Bank to develop green hydrogen plants. In addition, they seek to establish accurate carbon pricing through the Partnership for Market Readiness.
Africa is known for its recent energy transition into renewable sources, and solar and natural gas energy has fueled economies like South Africa, Algeria, and Uganda. Fortunately, multiple governments have been keen on change and are stepping into other alternatives to improve economic and social development.
According to statistics, by 2050, green hydrogen could increase the GDP of six African countries including Egypt, Namibia, Mauritania, Morocco and South Africa by $126 billion.
Nambia is perhaps Africa’s best placed country to exploit this new renewable energy. In 2021, the southern African country announced an estimated $9.4 billion green hydrogen project which is projected to enter the hydrogen production market by 2026.
Read: Powering Africa: Renewable’s safest bet for a sustainable future.
Hyphen Hydrogen Energy is aiding Namibia in establishing its first project that estimated at $10 million, with 175 kilotons per annum production capacity.
HyRail Namibia’s Hydrogen Diesel Dual Fuel Locomotive project intends to also introduce green hydrogen as an alternative locomotive fuel in the country. Namibia has shown the entire continent that alternative energy sources are the future for the energy transition in Africa. Other projects include: HDF Energy’s utility-scale solar hydrogen investment, Daures Green Village, H2 Pilot Plant/Refueling Station and the SCDI Green Hydrogen Project.
Egypt turns to green energy
Egypt, one of the big four countries in Africa, took a stand on this green opportunity with Mohammed Shaker, the country’s Minister of Electricity and renewable energy announcing last year that Cairo would turn to green hydrogen energy.
As a result, its government has partnered with several organizations to launch projects to increase green hydrogen energy production. Fortunately, the country had already dabbled in the hydrogen market and had some experience. Today the annual green hydrogen production from the Egypt Green Hydrogen SAE has increased by 15,000 tons.
Additionally, the north African country has launched other projects, including Maersk’s Green Fuels, Masdar Hassan Allam Utilities’ Suez Hydrogen, Mediterranean Coast Hydrogen project, H2 Industries’ Port Said Hydrogen Project, Total Eren and Enara Capital’s SCZONE Hydrogen Project, Alfanar’s Green Ammonia project, and the Globeleq’s Suez Canal Economic Zone facility.
These are a few of the green hydrogen energy projects the country has initiated as Egypt strives to become a global leader in the low-carbon hydrogen economy.
Read: Germany to fund four green hydrogen projects in Namibia.
Throughout its journey, Egypt has established frameworks built on several memoranda of understanding top among them an $8 billion green hydrogen plant in the Suez Canal Economic Zonr and a $3.5 billion project by Saudi Arabia’s Alfanar to produce green ammonia.
Mauritania
Despite its small size Mauritania has engaged in the hydrogen production market and is home to Africa’s two most extensive hydrogen facilities. The Aman Hydrogen Project and the Nour Green Hydrogen Plant produce 1700 and 600 kilotons per annum, respectively.
Recently, Mauritania landed another project with Conjuncta, a German project developer to build a $34 billion green hydrogen plant. Upon completion, this will set the pace for the country’s energy transition seeing it above other energy competitors such as South Africa.
According to the blueprints, the first phase will commence in the coastal capital of Nouakchott and will have the capacity to produce at least 400MW of power from green hydrogen energy. Fortunately, from these announcements, several other private sectors have taken the next step to propel the hydrogen supply within the country.
Read: Africa is priming for the US$12 trillion global hydrogen market.
At the moment, State-owned mining firms SNIM and ArcelorMittal produce steel using power from green hydrogen. Awed by this achievement, Mauritania signed an agreement with their provider to establish a large-scale production of green hydrogen energy, enough to supply power needs in a number of sectors in the country.
The northern country of Morocco is also aiming to propel its industrialization growth to rival Egypt and is investing substantially to transition in green hydrogen energy systems.
The Moroccan Ministry of Energy, Mines and Environment has set a road map to establish green hydrogen energy for the state, with the National Hydrogen Commission estimating that the nation will require up to 2GW of renewable energy by 2050.
According to the International Renewable Energy Agency, if the country sticks to its plan, it will become one of the largest green hydrogen energy producers. The government has previously launched renewable energy plants including HEVO Ammonia, German H2 & Ptx Derivatives Project, and Total Eren’s Green Ammonia Megaproject.
Among the three, the HEVO Ammonia project produces up to 31 kilotons per annum of green hydrogen, the largest hydrogen production plant in the country.
According to the World ENegry Council, Morocco could account for 4 percent of the global hydrogen demand by 2030. Given their roadmap estimation, they claimed that Morocco could meet a need of between 13.9TWh and 30.1 TWh in 2030, and this figure could reach 153.8TWh and 307.1TWHh in 2050.
The vision of green hydrogen is promising to various economies in Africa. Despite this, not all can fully realize it due to certain limitations. In truth, Africa has only tapped less than 20 percent of its renewable energy capabilities and green hydrogen still ranks at the bottom, compared to solar and wind.
With a valuation of $1 trillion, an increasing number of economies across Africa are jumping onto the possibility of tapping green energy to power their industrialization dream. With the steady adoption rate, it’s only a matter of time before the hydrogen supply in Africa becomes its new power source.
