Exploring Economic Expansion of Green Hydrogen Production in South Africa

Abstract

Hydrogen is a crucial energy carrier for the Clean Energy Sustainable Development Goals and the just transition to low/zero-carbon energy. As a top CO2-emitting country, hydrogen (especially green hydrogen) production in South Africa has gained momentum due to the availability of resources, such as solar energy, land, wind energy, platinum group metals (as catalysts for electrolysers), and water. However, the demand for green hydrogen in South Africa is insignificant, which implies that the majority of the production must be exported. Despite the positive developments, there are unclear matters, such as dependence on the national electricity grid for green hydrogen production and the cost of transporting it to Asian and European markets. Hence, this study aims to explore opportunities for economic expansion for sustainable production, transportation, storage, and utilisation of green hydrogen produced in South Africa. This paper uses a thematic literature review methodology. The key findings are that the available renewable energy sources, incentivizing the green economy, carbon taxation, and increasing the demand for green hydrogen in South Africa and Africa could decrease the cost of hydrogen from 3.54 to 1.40 €/kgH2 and thus stimulate its production, usage, and export. The appeal of green hydrogen lies in diversifying products to green hydrogen as an energy carrier, clean electricity, synthetic fuels, green ammonia and methanol, green fertilizers, and green steel production with the principal purpose of significant energy decarbonisation and economic and foreign earnings. These findings are expected to drive the African hydrogen revolution in agreement with the AU 2063 agenda.