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Hydrogen offers businesses a safeguard against South Africa’s unreliable grid

By David Whitehouse
Posted on Thursday, 27 June 2019 16:12

Electricity pylons in front of the cooling towers at the Lethabo thermal power station, a coal-burning Eskom power station near Sasolburg in the northern Free State province, March 2, 2016. REUTERS/Siphiwe Sibeko

The falling cost of generating hydrogen is increasing the options for companies in South Africa that need to protect themselves against the risk of load shedding by state power utility Eskom – while reducing carbon emissions at the same time.

According to a report by the International Energy Agency (IEA), The Future of Hydrogen, prepared for the G20 and released this month, hydrogen can help to decarbonise sectors such as long-haul transport, chemicals, and iron and steel. The IEA says that the lack of hydrogen infrastructure is holding back widespread adoption. Government and industry must work together to ensure regulations are not an unnecessary barrier to investment, the IEA says.

The IEA argues that lessons from the successful growth of the global LNG market can be leveraged in hydrogen. “International hydrogen trade needs to start soon if it is to make an impact on the global energy system,” the report says. The IEA says that major industrial ports can become the “nerve centres” for scaling up the use of clean hydrogen.

South Africa has the potential to be a key part of the hydrogen value chain.

  • Hydrogen fuel cells rely on platinum, a market dominated by South African supply.
  • The country is also well placed in terms of solar and wind resources, and so is in a position to generate hydrogen from renewable sources.
  • The use of ammonia to generate hydrogen more cheaply gives a way for companies to avoid load-shedding imposed by the state electricity utility Eskom.


South African telecoms companies are hit by higher operating costs whenever load-shedding strikes. GenCell CEO Rami Reshef has argued that using hydrogen as a backup energy solution has the potential to greatly reduce the impact.

The company uses technology to generate hydrogen cheaply from ammonia. Reshef says that the price of ammonia is half or even a third of the equivalent weight of diesel, and that a business could use his solution to have enough power for several days. A report published by Rethink Technology and GenCell in 2018 estimated that a mobile operator in South Africa implementing the GenCell backup product on 1,000 of its sites could save $200m over ten years compared with diesel. Reshef says he is in negotiations with several mobile operators in South Africa.

Gencell was founded in 2011 and is based in Israel. The company uses fuel cell technology that powers critical systems within American and Russian spacecraft and counts veterans of the Apollo and Mir space station projects among its employees.

It’s not just businesses that stand to benefit.

  • The commercial application of hydrogen fuel cells generated from ammonia in South Africa would accelerate the expansion of the mobile communications network to more off-grid and remote locations, the Rethink Technology report argues.

Bottom Line:

Hydrogen has the potential to cut the impact of Eskom outages for corporate users needing 24/7 power supply.

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