Attributed to Nadège Hopman, deputy head of the regional representation for Southern Africa and the Indian Ocean at the European Investment Bank
A recent visit to the European Union (EU) has helped South African decision makers clarify what SA Inc needs to do to become a green hydrogen powerhouse, writes European Investment Bank deputy head of the regional representation for Southern Africa and the Indian Ocean Nadège Hopman.
It is billed as the latest silver bullet to decarbonisation and climate change mitigation, but despite the increasing hype, the how’s and wherefores to ensure South Africa can establish a green hydrogen industry, let alone become a green hydrogen powerhouse, remain unclear.
While some of the core elements have always been understood – such as South Africa having an advantage in producing green hydrogen due to its solar and wind resources – there is much less clarity around global demand and offtake agreements, how to partner / collaborate to fully maximise returns, as well as what the different South African departments need to do to ensure the best environment for renewable hydrogen.
But a week-long visit by a team of top South African government officials – including directors from the President’s office, Departments of Mineral Resources and Energy, Trade, Industry and Competition, Transport and Science and Innovation, as well as senior managers and researchers from the Council for Science and Industrial Research (CSIR), Transnet’s Port Authority, the Industrial Development Corporation (IDC) and Hydrogen SA (HySA) – to the EU at the end of March to observe green hydrogen in action has gone a long way to providing SA Inc with a better measure of what is required.
The EU-sponsored tour and knowledge exchange took in a visit to the Port of Rotterdam (which is intent on becoming an international hub for hydrogen); a drop by to hydrogen valleys (where hydrogen-powered public transport services, vehicles and storage and logistics, for example, are being trialled) in the Netherlands, Belgium and Northern France; meetings with green hydrogen pioneers and funders; bilateral meetings with the EU Commission as well as a visit to the premier renewable hydrogen research institute in Germany to provide SA Inc with a 360° view of what is possible and how it can be done.
The tour – providing as it did the first opportunity, post-Covid, for government officials to exchange views, face-to-face, on their understanding of the challenges presented and how they could be overcome – was deemed incredibly useful in providing a roadmap for SA Inc to establish a competitive and sustainable green hydrogen economy.
One of the biggest takeaways for South African decision makers was that South Africa must move with speed to establish a green hydrogen industry if it wants to become a global player. While determining future demand and securing offtake agreements are desirable, the Russian-Ukrainian war, rises in fuel prices, as well as accelerating climate change have demonstrated that the shift to alternate energy sources is not only real, but is also here. The demand for renewable hydrogen is no longer blue sky thinking, it is reality, and there is no time to waste.
The second lesson is that South Africa Inc needs to work together – and expeditiously – to provide an enabling and conducive environment for the optimum exploitation of the green hydrogen value chain. For example, the Department of Science and Technology (DST) has already conducted a pre-feasibility study into the establishment of Hydrogen Valleys – referred to locally as Platinum Valleys – in Gauteng, Limpopo and KwaZulu-Natal. This is largely targeted at providing a new pipeline / future for South Africa’s platinum industry. However, it has potential for other sectors of the economy as well, and coordination among all concerned government departments is critical.
Another takeaway is the importance for South Africa to partner on a regional and international scale to enhance its offering, be it on technology, skills development, standards and certifications. Indeed, developing the necessary skills to allow South Africa to reap the benefits of the whole green hydrogen ecosystem is therefore an absolute necessity in the very short term.
Finally, there is marketing. In the face of robust global competition (Chile and Australia have been faster out of the starting blocks than South Africa, while North Africa is better situated with regard to their proximity to Europe), South Africa Inc will need to develop a targeted strategy to clearly articulate and communicate South Africa’s competitive advantage on the global stage.
The way forward is clear; where to next?
We would welcome a visit from EU government officials to South Africa for them to see first-hand the developments already happening in the country, and to build on the momentum created during the study tour to move from planning to projects.