While renewable energy prices are tracking lower and electrolyser technology is evolving, the availability of water as an input for the production of green hydrogen, sustainably generated from renewable power sources, and the specific markets for green hydrogen products, are important focus areas for project developers, a panel of industry experts said on June 3.

Industrial technology multinational Siemens Energy Southern and Eastern Africa sales and generation VP Mark van Antwerp, law firm Webber Wentzel partner Gillian Niven and environmental consultancy SLR Africa power sector lead Stuart Heather-Clark spoke during a briefing on the global, technological and local regulatory framework, obstacles and opportunities for the production of green hydrogen in South Africa.

Water is a fundamental input for the production of hydrogen through electrolysis powered by renewable energy sources. Van Antwerp said about 20 t of untreated water is needed to produce about 1 t of hydrogen, and the water needs to be demineralised prior to use.

This presents a problem inland and on the coast, as projects will need to contemplate long-term supply from ground water, seawater, mine water or wastewater, as well as the environmental impact, such as waste treatment and disposal, and associated permitting requirements, said Clark.

Pure hydrogen is difficult and inefficient to transport and, except for on-site use, is often transferred into an electrofuel, such as methanol or ammonia. The intended use and potential offtakers of the product must be considered before deciding on the method of transport for the product, said Van Antwerp.

The use of green hydrogen in these e-fuel projects would need additional industrial and environmental permits, as the fuels are often toxic and dangerous, said Clark.

Niven highlighted that green hydrogen falls into a regulatory gap, as the Gas Act applies specifically to hydrocarbon gases. Regulators are familiar with renewable energy generation projects owing to the government's Renewable Energy Independent Power Producer Procurement Programme, but it remains to be seen whether they will take a risk-averse approach to licensing green hydrogen projects, such as by incorporating conditions into authorisations issued.

Clark added that the various components of green hydrogen projects were well understood from a regulatory and environmental impact perspective, but were not typically required in combination, which added to permitting complexity.

Green hydrogen project developers must consider all aspects of the project and offtake, including generation, transmission, production, storage, transport and use, to develop a highly detailed permitting process and minimise potential delays.

Further, owing to the rapid development in the renewable energy industry and technological advances in electrolysis, project developers must also aim to ensure that their permits were sufficiently broad to enable them to use the latest and most effective technologies when they were available, such as installing more efficient electrolysers, without breaching their regulatory requirements, he said.

Despite the technical and regulatory challenges facing the development of green hydrogen projects, green hydrogen would be needed to decarbonise various industrial processes and transport, including by replacing fuels such as diesel, said Van Antwerp.

"Renewable energy typically comprises 70% of the costs of green hydrogen projects, and renewable energy costs are trending lower.

"However, the load factor is an important consideration for the economic viability of green hydrogen projects and hybrid applications, such as renewable energy and battery storage installations, could be more competitive as getting as close to baseload operations as possible is important."

Research indicates that, for an electrolyser to be economical, it must operate about 4 000 hours a year. Renewable energy projects only provide a 30% to 40% load factor on average, unless combined with energy storage.

However, the green hydrogen industrial and utility-scale pilot and test projects Siemens is involved in are moving towards being competitive, he added.

"We are in a learning environment, but we are working with our industrial and utility-scale partners to determine which applications are suitable for green hydrogen. As we operate the demonstration plants, we will have more answers and be more decisive about the way forward."

Siemens recommends that companies investigating green hydrogen projects take a phased approach in their development, especially as further lessons are learned and input costs trend lower, Van Antwerp said.

The challenges facing green hydrogen development and production in South Africa were not insurmountable and, while projects must be carefully planned, it was an exciting and positive time to be in the energy industry locally and worldwide, said Clark.

"We have to view green hydrogen as one part of the energy mix and it is one of many avenues that must be pursued to achieve the objective of a just transition away from a dependence on a single fuel source, such as coal, as well as supporting a reduction in emissions from mining, fertiliser production and industrial processes," said Niven.

"It is important to recognise that the impacts of the global electricity transition are not isolated to electricity generation, but that green hydrogen can allow the production of green ammonia, production of e-fuels to displace diesel, or provide alternative ways to heat industrial processes. Hydrogen has a role to play owing to the diversity of use it can offer in terms of green fuels," she said.