The quiet race to strike green hydrogen pay dirt

As the West vies to counterbalance China in Africa, many experts see green hydrogen as an area where Brussels and Washington will have leverage over Beijing, as well as an opportunity to strike energy "gold".

The emerging green hydrogen market will redraw the global energy and resource map as early as 2030, creating a $1.4 trillion-a-year market by 2050, according to Deloitte.

And while the world's attention has been fixed on traditional energy giants of the Middle East and North America, Africa is quietly positioning itself as a contender in the race to ignite a green hydrogen era

Germany, for instance, has already teamed up with Namibia on green hydrogen development, while Norway has teamed up with Egypt.

Giving Africa's hydrogen economy a head start is its abundant renewable energy resources, competitive labour costs and the space for mega projects.

Green hydrogen, unlike its grey or blue counterparts, is produced using renewable energy sources, primarily solar and wind.

This process ensures zero carbon emissions, making it a sought-after solution for industries and sectors that are challenging to decarbonise. With its abundant sun and vast wind corridors, Africa presents an ideal landscape for green hydrogen production.

Parts of Mauritania's Atlantic coast, for instance, have around 14 hours of sunshine per day in the summer months, with an intensity that can reach 8,000 watts per square metre.

Economist and investment analyst Aly-Kahn Satchu noted that the proximity to the point of consumption in Europe makes Africa, and especially the Maghreb states, ideal candidates for investment into the sector.

"The advantage lies with those countries that have renewable resources and ready logistics and infrastructure into demand markets," said Satchu, CEO of Rich Management Ltd.

"Morocco (also those countries which are on the Mediterranean), Kenya and Tanzania, South Africa and Namibia stand out."

But Satchu emphasised that Africa needs to work at building out a hydrogen offering on a continental scale, tapping development banks like the Africa Development Bank (AfDB) and Afreximbank, as well as the EU and Asian partners, for financing.

Joyce Kabui, manager at the Africa Green Hydrogen Organisation (AGHA), echoed Satchu's sentiments, asserting that Africa's clean energy leverage is unmatched and seeing a bright future for the energy source on the continent.

"With the anticipated investments, Africa's green hydrogen development is expected to grow," she said.

In mid-August, the UN’s new Africa Environment Outlook for Business said the continent is emerging as one of the most cost-effective regions for hydrogen production, with the capacity to generate a staggering 5,000 Mt annually, at less than $2 per kilogramme.

With reduced capital expenditure on electrolysis (the process of using electricity to split water into hydrogen and oxygen), green hydrogen will be able to outcompete fossil fuels. One of the companies working on hydrogen electrolyser designs that could make green hydrogen production cost-competitive is South African firm, Hydrox Holdings Ltd.

Jason Cuomo, Lead Process Engineer at Hydrox, said that developing groundbreaking technology like theirs is critical for the continent's push to become a net green hydrogen exporter. Hydrox uses a membrane-less alkaline water electrolysis system. "Liquid alkaline electrolysers are pretty much the equipment that is showing the best economics to produce hydrogen at the moment," he told bird.

"So, being a local player, having the cost savings that come associated with that and deployed to the South African market, we are aiming for our solution to come at the lowest cost in terms of oxygen production," Cuomo told bird.

Last November, Egypt's emerged as a frontrunner in the green hydrogen race after securing a deal with Norway to build a 100MW plant at Ain Sokhna, on the Red Sea.

The facility in Egypt will be built in partnership with the Norwegian energy behemoth Scatec, a significant developer at Egypt’s massive Benban solar park in Upper Egypt’s Aswan. Benban is the fourth largest solar farm in the world, with installed capacity of 1.8 GW.

Other African states are also slowly gravitating towards leveraging their rich renewable energy base to build green supply chains.

Namibia plans to shell out US$9 billion to build a 5GW green hydrogen project at Tsau/Khaeb National Park and is set to make its maiden hydrogen production in 2026. The first phase will generate 2GW worth of renewable electricity, which will be upscaled to 5GW.

The country is also said to have enormous potential for scaling up a green hydrogen industry, with its large availability of spaces and sunlight and high wind speeds.

South Africa, holding 80 per cent of the global platinum group metals (PGMs) reserves that are used for green hydrogen production, is also positioning itself to build a green hydrogen industry.

PGMs are used in the electrolysers needed to produce green hydrogen as a fuel, giving the nation an advantage in developing a green hydrogen value chain and offering the country an opportunity to become a key supplier in the global hydrogen market.

The country has recognised the opportunity and is building a hyrdrogen export facility at Boegoebaai, in the country's Northern Cape province.

According to AGHA, Africa could require up to $900 billion in cumulative investment by 2050. This translates to about $6 billion each year between now and 2030, about $30 billion each year between 2030 and 2040, and about $55 billion each year between 2040 and 2050.

Talks on the transportation of green hydrogen are also taking shape, with states working on proposals for shared infrastructure to lower costs.