In the Country Climate and Development Report for South Africa, a joint World Bank Group and Presidential Climate Commission publication, the cost of the country’s decarbonisation, adaptation, and just transition approach could climb to R2.4tr ($140bn) by 2030, or around 4.4% of South Africa’s GDP per year.
The Africa Report takes a look at 10 facts about South Africa’s plans for green hydrogen, as Africa’s most industrialised nation remains one of the world’s most carbon-intensive economies.
1. Coal job losses
Mpumalanga – home to South Africa’s coal-mining belt, more than 80% of the country’s coal-fired power plants, and Sasol’s coal-to-liquids industrial complex – has been identified as the site where an estimated 150,000 to 200,000 jobs are at risk.
Most of the projected job losses are expected during the 2030s, when the petrochemical and energy firm is predicted to close its coal-to-liquids operations and Eskom will have decommissioned several of its coal plants, according to the World Bank and the Commission.
However, the green hydrogen replacement jobs for both skilled and semi-skilled labour will only start materialising in the 2040s, states the report.
2. Key to energy investment
In its Just Energy Transition Investment Plan, the government earmarks green hydrogen as one of the big four frontiers. President Cyril Ramaphosa said at the Green Hydrogen Summit that South Africa could emerge as a key player in the green hydrogen value chain.
The government estimates that, by 2050, the country will have the potential to produce six to 13 million tonnes of green hydrogen and derivatives a year.
3. Sectoral approach
In its Green Hydrogen Society Roadmap, compiled by the department of science and technology and published in 2021, the government wants to use green hydrogen to decarbonise the country’s transport sectors and energy-intensive industry, as well as develop manufacturing and transform the power sector.
Key areas include heavy-duty vehicles, shipping, aviation, rail, steel, chemicals, mining, refineries, and cement.
4. Industrial edge
Binding hydrogen with carbon dioxide can produce methane, diesel, and jet fuel.
Sasol owns and holds the patent for the Fischer-Tropsch (FT) industrial process, which the government says places South Africa in an advantageous position in the production of liquid fuels based on the hydrogen production route.
5. Platinum advantage
South Africa holds 75% of the world’s proven deposits of platinum group metals, which are a key component of electrolysers in hydrogen production and catalysts in fuel cells.
Sasol, Hive Energy, and Anglo American are working with the government to produce green hydrogen to power mining haul trucks, which reduce diesel consumption by 80%, according to the World Bank and Commission report.
Anglo American plans to roll out 40 such trucks at the company’s Mogalakwena platinum mine in Limpopo by 2024. The miner aims to build the largest electrolyser in Africa to generate fuel for the pilot.
6. Repurposing assets
Sasol’s Executive Vice President of Energy and Technology, Simon Baloyi, says the company is one of the largest producers of grey hydrogen. Currently, Sasol produces 2.4 million tonnes of grey hydrogen per annum.
“This hydrogen will position us to become a green hydrogen major and to lead the development of a Southern Africa green hydrogen economy,” according to Baloyi.
Sasol executive vice president of the Energy Business Priscillah Mabelane says the company wants to reposition Sasolburg, and has undertaken a feasibility look that will be completed in 2024.
The study will explore the possible production of sustainable fuels, such as aviation fuel, green ammonia, and methanol from a chemical perspective.
“By leveraging this existing commercial scale asset, we believe Sasolburg can be a low-cost producer of green hydrogen and fuels in the near future,” Mabelane says.
7. Green steel
Sasol and ArcelorMittal South Africa are conducting studies to understand the cost-effectiveness of carbon emissions from steel.
Through a recently announced partnership, Sasol and ArcelorMittal South Africa are exploring the feasibility of the production of green hydrogen and green steel at the latter’s Saldanha facility.
“We are also looking at the opportunity to export green ammonia for markets such as Asia and Europe, which have outlined demand,” says Mabelane.
8. Existing storage infrastructure can be used
The government notes in the Green Hydrogen Society Roadmap that the infrastructure required to export hydrogen is similar to existing natural gas networks.
According to the roadmap, the natural gas market infrastructure could be used for hydrogen storage. “Many of the gas fields off the coast of South Africa are depleted, yet the infrastructure linking these fields to the coast still exists.”
9. Green hydrogen hub
The government has designated Boegoebaai, a port in the Northern Cape, as a green hydrogen hub, part of the Strategic Integrated Project.
A feasibility study is underway to determine Boegoebaai’s potential to become a global export hub for green hydrogen and ammonia. Sasol is leading the project in partnership with the Industrial Development Corporation.
10. Developing capacity
Between 2021 and 2024, the government wants to pilot small-scale electrolysis production and at least 1 megawatt (MW) of green hydrogen.
In the medium term, covering 2025 to 2030, the government targets 5 gigawatts (GW) of electrolysis capacity in the Northern Cape, and wants 10GW of electrolysis capacity deployed in the province by 2030.
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