South Africa stands at the forefront of a dynamic energy revolution, a beacon of hope in a world grappling with climate change. With an abundance of renewable resources, including solar and wind power, the country is poised to unlock the potential of renewable hydrogen production through electrolysis, marking a pivotal step towards a sustainable and clean energy future.
Recognizing the significance of green hydrogen in the energy transition, the South African government has included it as a key aspect of its energy plans. Speaking at the African Energy Chamber’s (AEC) Hydrogen Summit in 2023, Kgosientsho Ramakgopa, the Minister in the Presidency for Electricity, emphasized its pivotal role in South Africa’s energy strategy.
“By 2040, Africa could produce 50 times more energy from renewables than the world’s estimated demand,” he stated, underlining the continent’s potential in renewable energy. He also highlighted the ambitious target of achieving $1 per kg by 2050, positioning South Africa as one of the most competitive industrial economies.
During the 2023 South African Green Hydrogen Summit, President Cyril Ramaphosa emphasized the significant role of the green hydrogen economy in South Africa’s development and equitable energy transition. He noted that the hydrogen economy could add 3.6% to the nation’s GDP by 2050 and create approximately 370,000 jobs. The president also stressed that for the world to limit global warming to less than 1.5 degrees Celsius, green hydrogen will need to constitute 10% to 20% of the global energy mix.
South Africa’s Investment Strategy, approved by the Cabinet in 2023, identifies green hydrogen as a significant strategic sector expected to attract both foreign and domestic direct investment. This commitment is part of the country’s ambition to establish itself as a global leader in this rapidly expanding industry.
The development of hydrogen production facilities and distribution networks is crucial to the successful implementation of renewable hydrogen technology. Investments in research and development, along with collaborations between industry, academia, and the government, will drive innovation in green hydrogen technologies.
In June 2023, South Africa concluded a Heads of Agreement to launch the SA-H2 Fund, an innovative blended finance fund aimed at developing the renewable hydrogen sector and a circular economy in the country. This Fund, seeking to raise about US$1 billion, represents a collaboration of private and public institutions, both locally and internationally.
The SA-H2 Fund focuses on fast-tracking funding towards large-scale renewable hydrogen energy infrastructure development and construction in South Africa. It represents a significant capacity to address the climate crisis through blended finance support.
The effective deployment of renewable hydrogen in South Africa comes with several challenges, including high initial investment costs and the need for scientific and technological innovation. Cooperation with international partners and drawing on global best practices will be crucial in promoting the use of renewable hydrogen.
To scale up regional cooperation around green hydrogen, six African countries—Egypt, Kenya, Mauritania, Morocco, Namibia, and South Africa—have formed the Africa Green Hydrogen Alliance. This alliance aims to intensify collaboration and supercharge the development of renewable hydrogen projects on the African continent. It seeks to leverage Africa’s renewable hydrogen industry potential by promoting technical support, funding, and market access to international partners.
President Ramaphosa highlighted the importance of close cooperation between public, private, and financial partners in unlocking Africa’s green hydrogen potential. This collaboration will enable mass-scale domestic and international demand for green hydrogen and increase cooperation on green hydrogen production, storage, and distribution infrastructure.
In conclusion, the prospects for renewable hydrogen in South Africa seem bright. It has the potential to support sustainable development goals for the country, decrease carbon emissions, and open new economic opportunities, paving the way for a future that is both sustainable and prosperous.
