South Africa’s decade-long investment in hydrogen energy development and research is expected to pay off as fossil fuel companies turn to greener futures.
Petrochemical giant Sasol and Anglo American are among the companies gearing up to restructure their businesses for hydrogen and fuel cell technology development.
Opportunities for Eskom were highlighted at the Joburg Indaba on Wednesday where it was pointed out that decommissioned coal-fired power infrastructure could be transformed into chemical hubs for green hydrogen production.
The trade and industry department established an expert panel in July to “advise on commercialisation strategies, key policy interventions, maximisation of localisation opportunities and funding models to drive large scale production”, said Malebo Mabitje-Thompson, the department’s acting director general.
The Minerals Council, which represents about 90% of the industry, said the country’s hydrogen opportunities were a game changer.
“The global energy mix is changing from power generation to transportation. As we talk about the just energy transition, hydrogen is a key energy carrier,” the council’s chief executive, Roger Baxter, told the indaba.
South Africa has ideal weather conditions for solar and wind generation, which are the renewable energy options typically used in green hydrogen production, according to the science and innovation department, which told the Mail & Guardian that high solar and wind availability increases the use of hydrogen electrolysers, lowering the cost of green hydrogen production.
The department said platinum group metal beneficiation was a key economic opportunity and a driving force for advancing hydrogen and fuel cell production. Platinum group metals (PGMs) are a key component of electrolysers in hydrogen production and as catalysts in fuel cells.
“In this regard, the country has a window of opportunity to develop PGM-based components for hydrogen production to meet the demands of countries which have developed policies to integrate hydrogen in their economies,” it said.
The government believes that within 10 years Japan, South Korea and the European Union will emerge as the main export destinations for green hydrogen, given the advancement of policies in these countries.
Thomas Roos, of the Council for Scientific and Industrial Research, told the indaba that South Africa could monetise its endowment of wind and sunshine through hydrogen exports.
Hydrogen and fuel cell technology energy alternatives are still at an infancy, making prices exorbitant. But this is expected to change as markets open up to hydrogen over the next decade.
Each country planning to produce hydrogen has set out its target price for green hydrogen, ranging from $1.5 a kilogramme to $2/kg by 2030.
The department of science and innovation said the target price is based on the committed investments. “Some studies indicate that such prices may not be beyond the reach of South Africa. However, large scale — gigawatts scale — green hydrogen production projects will need to be deployed to achieve the economies of scale required.”
Air Products South Africa said the price of grey hydrogen in South Africa was about R300/kg ($21,17) in February 2021. The Japanese target price for imported blue/green hydrogen is set at R52.20/kg ($3.68).
“This has been labelled as achievable for South African hydrogen producers. Furthermore, a joint European Union and South African investigation into power fuels and green hydrogen found that a long-term price of R26.50 per kg for exported South African green hydrogen is possible,” the department added.
A roadmap for hydrogen development was launched in 2020 and followed by feasibility studies in March this year.