Report highlights Africa hydrogen opportunity
27 March 2024
Developing renewable hydrogen production in Africa would allow African nations to meet domestic electricity needs while becoming a major exporter to supply growing global demand, according to a new report released by the Hydrogen Council.
The Hydrogen Council is a global CEO-led initiative that brings together leading companies with a united vision and ambition for hydrogen to accelerate the clean energy transition.
The Africa Hydrogen Opportunity, co-authored by McKinsey & Company, highlights that Africa is exceptionally well-positioned to produce renewable hydrogen and derivatives thanks to its world-class solar, wind, geothermal and hydropower resources.
Source: Africa Hydrogen Opportunity
Cost-effective renewable hydrogen production could accelerate deployment of renewable power for domestic use across the continent supporting industrial development and just transition. At the same time, scaling up renewable hydrogen export industries in African countries could capture a significant share of the expected global market, mobilizing cumulative investment of $400 billion.
The hydrogen industry can create some 13 million job-years for African countries by mid-century, according to the report. In South Africa alone, the hydrogen economy could add 3.6% to South Africa’s GDP by 2050 and create more than 370,000 jobs, as highlighted by the Ministry of Science and Innovation of South Africa at the Hydrogen Council’s recent meeting in Johannesburg. Global hydrogen leaders and decision-makers from the region gathered to advance solutions for accelerating hydrogen economy in the region.
However, the report finds higher financing costs alongside infrastructure and skilled labour availability are currently an obstacle in Africa compared to other regions, making the expected hydrogen production cost of African countries higher than those in the Middle East and Australia. Stakeholders could consider taking one or multiple of several actions to reduce cost of financing, leading to increased chance of project success.
Unlocking Africa’s renewable hydrogen potential will require coordinated efforts across public and private sectors. By working together to create a supportive economic and legal framework that helps mitigate risk and enables investment, we can realize the economic benefits while accelerating the energy transition worldwide.
—Sanjiv Lamba, CEO of Linde and Co-Chair of the Hydrogen Council
Developing a hydrogen economy is an opportunity for a just transition in Africa that ensures nobody is left behind – one that drives sustainable economic growth, creates millions of new jobs, increases access to affordable clean energy. With the right investments and public-private collaboration, African nations can leverage their world-class renewable resources to meet domestic needs and become exporters, all while ensuring communities see the benefits through workforce development, value-added industries and energy security.
—Fleetwood Grobler, President and CEO of Sasol
Putting aside the fact that "Africa" isn't a single country or economy, wouldn't these countries be better-off using their electricity directly instead of converting it to hydrogen?
As always, you'll find a few uses for hydrogen, but for the most part it's just an expensive and inefficient form of "liquid electricity."
Posted by: Bernard | 27 March 2024 at 05:51 AM
Bernard:
It is unclear why you should imagine that anyone is going to incur losses where it is practical not to do so.
The issue is that in many cases you can't just plug stuff in to draw power when it is needed.
This is especially true in Africa, where in rural areas there is simply no grid, certainly not a reliable one.
Sure, a large part of the answer is to use solar panels on site, backed up by whatever batteries can be managed affordably, but that solution does not have the universality you imply.
The competition is kerosene delivered in jerrycans, not power coming reliably through any sort of grid.
Posted by: Davemart | 27 March 2024 at 06:42 AM
This is largely hydrogen for export, not home consumption.
As Daimler argue:
https://www.hydrogeninsight.com/transport/cheapest-way-to-decarbonise-heavy-vehicles-is-to-invest-in-both-hydrogen-and-electric-infrastructure-daimler/2-1-1613442
' Gorbach also hit back at a criticism often levied at hydrogen for vehicles: efficiency.
Since green hydrogen is produced from renewable electricity, with efficiency losses when converting power to hydrogen and back again inside a vehicle, as well as from the transportation, storage and distribution of H2, only about 30% of the original energy input can be used at the wheel of a fuel-cell vehicle. This has led many analysts to argue that directly using that green electricity would be more than twice as efficient — and far cheaper than using green hydrogen.
But Gorbach argues that this is not comparing apples with apples.
“There is a balanced “sun-to-wheel” efficiency for hydrogen trucks and battery trucks,” he wrote.
“Because with green hydrogen coming from a solar installation in the sunny south, a hydrogen truck can travel a similar range per year as a battery truck with energy coming from a solar installation of the same size in Europe.
“In short: The higher efficiency of solar panels in sunny regions can compensate the lower efficiency due to electrolysis and drive train conversion.”'
Both sides of the ledger count, not just one.
Posted by: Davemart | 27 March 2024 at 06:51 AM
Davemart, that goes back to my first point. Outdated clichés about Africa abound. While I'm sure that a small number of people live in isolated areas where a kerosene truck comes-by every fortnight, it's really a continent of megacities.
The solution to an unreliable grid (where that's the case) surely isn't to invest in a non-grid of hydrogen tankers. That's something that fully developed nations with excess electricity production should spend their excess cash on.
History teaches us that building such infrastructure for export purposes will only benefit a small minority (who don't need the help anyway). It seems lie a bad idea in every way.
Posted by: Bernard | 27 March 2024 at 08:55 AM
Bernard:
Your habit of making claims without supplying references means that you don't even bother to check the supposed data on which you make your claims.
You claim:
'While I'm sure that a small number of people live in isolated areas where a kerosene truck comes-by every fortnight, it's really a continent of megacities. '
Here is the World Bank:
https://www.worldbank.org/en/news/press-release/2023/02/26/solar-mini-grids-could-sustainably-power-380-million-people-in-afe-africa-by-2030-if-action-is-taken-now
'In Sub-Saharan Africa, 568 million people still lack access to electricity. Globally, nearly 8 out of 10 people without electricity live in Africa. At the current rate of progress, 595 million Africans will remain unconnected in 2030.'
Your conclusions have no chance of being accurate when they are based on sloppy or non-existent research.
Garbage in, garbage out.
As my link shows. solar mini grids would be a great way forward.
But at present sub-saharan Africa remains a continent of truck delivery of kerosene, just as I have said.
Posted by: Davemart | 27 March 2024 at 09:25 AM
Davemart,
If the problem is lack of grid access, surely the solution is improving the grid, not creating yet another resource export business, where the main export is profits, to European banks!
The hydrogen solution that you propose is just a repetition of old "solutions" that made Shell, and shell companies, lots of money, with no benefit to society.
How exactly would exporting more natural resources help, exactly? Should we just trust that people will feel proud that richer countries are using their resources, while all they get is imported kerosene and associated pollution?
Posted by: Bernard | 27 March 2024 at 10:37 AM
Bernard:
You are changing the subject.
You posted complete nonsense on the percentage of grid connection in sub-saharan Africa, from which set of false assumptions you drew wholly unwarranted conclusions, and now are going on to 'and another thing 'argumentation.
Most of us, and all reasonable people, would be embarrassed.
And none of this is 'my solution' but solutions the govenments in Africa are proposing to earn valuable revenue.
There is zero issue with providing plenty of solar for hydrogen in addition to effectively unlimited solar for consumption within Africa, as the resource base is gigantic.
Why you should imagine that you know better when you don't even know the basics is mysterious.
And to seek to simply ignore that you have been caught posting nonsense shows that the worth of your judgements, I am afraid
I have made mistakes many, many times, but I hold my hand up, I don't try to pretend that I have not done something outstandingly dumb.
Posted by: Davemart | 27 March 2024 at 11:04 AM
Davemart, perhaps you missed the part where you argued for hydrogen export opportunities, while also mentioning that grid access was a huge issue. One is not a solution for the other, quite the opposite. Historically, these kind of schemes have kept resources away from Africans, like it or not.
Plus "a global CEO-led initiative" is hardly something that should be accepted without shedding a light into motives, even if your solution for every problem is "hydrogen."
Perhaps one thing that confuses you is the idea that poor grid access means that communities are geographically isolated. Those do not go hand in hand.
Posted by: Bernard | 27 March 2024 at 12:38 PM
@Bernard
Still no acknowledgement that you were talking entirely ill informed nonsense in your claims of grid connectivity in sub saharan Africa.
The problem is not what we don't know, what we think we know which just ain't so.
Not admitting fault has the result that you can't reset from a sensible position, as knowing nothing is fine.
What does the damage is having an opinion, which you hang on to to regardless, and is way, way worse than honest ignorance.
You think you know, and have not got a clue, but are incapable of learning as you imagine your opinion to have worth even when it bears no relation to reality.
I won't waste any more time on your opinions, which bear no relation at all to reality.
Posted by: Davemart | 27 March 2024 at 01:40 PM
Davemart,
Since you are incapable of doing research when you know in advance that it will contradict your beliefs.
Percentage of urban population in sub-Saharan Africa:
https://data.worldbank.org/indicator/SP.RUR.TOTL.ZS?locations=ZG
https://www.sciencedirect.com/science/article/pii/S2590051X23000230
https://www.brookings.edu/articles/figures-of-the-week-africas-urbanization-dynamics/
Executive summary: your notion of a mostly rural, sparsely populated continent hasn't been true since the 1950s, at the latest, which I suspect is when you last checked!
On an earlier topic about methane leakage in natural gas infrastructure, Climatetown just did a long explainer on Youtube:
https://youtu.be/K2oL4SFwkkw?si=8TrXJV0xyao4Vz-n
Here are all the sources mentioned in the episode:
https://www.climatetownproductions.com/methane-gas
I am under no illusion that you will accept World Bank data, or Brookings, or peer-reviewed academic research, given that they contradict what you consider to be facts (conveniently provided by the oil industry).
Note: I do appreciate your promise to stop harassing people who rebuke your rhetoric. Wish that it were true.
Posted by: Bernard | 28 March 2024 at 07:15 AM
Well said Bernard.
Posted by: bman | 28 March 2024 at 11:12 PM
@Bernard,
Davemart made a good point about Hydrogen to be used when and where direct electricity is not available. So, Hydrogen is for supplementing direct green electricity and not in competition with direct electricity. Hydrogen can be transported via piping network to all end users just like natural gas in use now.
You oppose the exportation of green H2 from Africa because it will enrich only a small number of people, however, the money will trickle down throughout the local economy and the poor people will still benefit through the increase in local jobs available and increase in wages. More importantly, the exportation of green H2 will displace fossil fuel consumption and will benefit the whole world.
Posted by: Roger Pham | 01 April 2024 at 04:06 PM