Has KZN missed the green hydrogen bus?

DESPITE being home to two ports, a skilled workforce with experience in refining fossil fuels and an abundance of land, sun and seawater, the only piece of immediate hydrogen action destined for KwaZulu-Natal is its role in the Hydrogen Valley Programme. This programme is one of the nine hydrogen projects given government status as strategic integrated projects (SIP) in November 2022. The Hydrogen Valley Programme is an Anglo-American initiative with JV partners and includes nine projects along the Limpopo, Gauteng to KwaZulu-Natal corridor.

Four of the priority projects are in the Northern Cape: the Prieska Power Reserve, the Ubuntu Green Energy Hydrogen Project, Boegoebaai Green Hydrogen Development, and the Upilanga Solar and Green H2 Park; the Western Cape has the Atlanthia Green Hydrogen project; the Free State the Saolburg Green Hydrogen 60 MW project; Mpumalanga has the SASOL HySHiFT (Secunda) project and the Eastern Cape is home to the HIVE Ammonia project.

Funds are starting to flow into green hydrogen projects and, on June 20, a new ‘SA-H2 Fund’ (SA-H2) was launched as a dedicated Green Hydrogen Fund. During the visit of Prime Minister Mark Rutte from the Netherlands and Prime Minister Mette Frederiksen from Denmark to President Cyril Ramaphosa, a Heads of Agreement was concluded with the intention to launch SA-H2 as an innovative blended finance fund, that will facilitate and accelerate the development of a green hydrogen sector and circular economy in South Africa, according to the Development Bank of SA.

The SA-H2 Fund initiative will aim to secure US$1 billion in funding, to be raised directly in South Africa or indirectly via other channels. Its focus will be to fast-track the mobilisation of funding towards the development and construction of large-scale green hydrogen infrastructure assets across South Africa.

At the launch of the fund, chief operations officer of the IDC, Joanne Bate, said: “Recent efforts by both the public and private sectors have resulted in a significant ramp-up of green hydrogen projects in South Africa that are being developed along the value chain. In November 2022, twenty green hydrogen projects were included in the Government Gazette with nine given status as strategic integrated projects (SIP) which will expedite the development and implementation of these projects. SA-H2 will be needed to support these projects and develop this new industry for South Africa.”

eThekwini Municipality’s Hydrogen Strategy

The eThekwini Hydrogen strategy (HS) states that it “complements the release of the national Hydrogen Society Roadmap and the Hydrogen Valley Report, both of which outline the government’s support to move the hydrogen agenda forward in South Africa”.

For the basis of the investigation for the establishment of hydrogen hubs, the report included Durban Metro, Richards Bay and Cato Ridge. “Each of the nodes represents a possible hub with associated supply and demand of electricity, hydrogen, and conventional fuels,” the report states.

The eThekwini Municipality, in partnership with the South Africa-UK PACT (Partnering for Accelerated Climate Transitions) program, commissioned consulting firm, Arup, to develop the Hydrogen Strategy report.

The aim of the report was to outline the opportunities that lie in leveraging local skills, resources, and expertise to establish a future hydrogen economy in the eThekwini and Richards Bay regions.

The strategy was formulated after extensive research and community engagements. The following findings are suggested based on modelling done from the data gathered:

“Deployment of renewable (wind and solar) technologies should be prioritised for use in the electricity system to increase energy access, increase reliability, and reduce emissions.
Across all scenarios, significant infrastructure capacity increase will be required to produce hydrogen cost optimally.
Having a mix of hydrogen production technologies was key for producing hydrogen at a lower cost. Bringing in additional advanced thermal technologies (waste and biomass gasification) to produce hydrogen was found to increase the hydrogen production capacity, supported by local resources and jobs.
Hydrogen can be used to manufacture synthetic fuels that have traditionally been derived from oil. If the cost of producing hydrogen is low enough, the enabling infrastructure is available, and a suitable market framework exists, it could be possible to produce synthetic fuels that are cheaper than fuels derived from imported oil.
By leveraging the intrinsic hydrogen demand available within the current conventional fossil fuels market, uptake of synthetic fuels would have no impact on end users other than from a cost reduction perspective. It could also make use of the large-scale hydrogen production infrastructure needed to meet the demand to efficiently achieve economies of scale conducive to widespread domestic uptake and participation in future hydrogen export markets. Additionally, most existing infrastructure and jobs associated with transmission, storage and distribution of fossil fuels can be repurposed for synthetic fuels without modification,” the HS report states.

Next steps for the strategy include additional feasibility studies and pilot projects with municipal entities and State-owned enterprises. With regards to funding, the strategy suggests tapping into green climate financing and grant funding, for example, the C40 Cities, UK PACT Country Programs and the City Climate Finance Gap Fund.

Getting on the roadmap

Published by the Department of Science and Innovation, the Hydrogen Society Roadmap sets national ambitions and sectors prioritisation on the deployment of the hydrogen economy in South Africa, in line with the Integrated Energy Plan.

A total of 70 priority actions have been identified across these high-level outcomes:

Decarbonisation of heavy-duty transport
Decarbonisation of energy-intensive industry (cement, steel, mining, refineries)
Enhanced and green power sector (main and micro-grids)
Centre of Excellence in Manufacturing for hydrogen products and fuel cell components
Creating an export market for South African green hydrogen
Increase the role of hydrogen (grey, blue, turquoise and green) in the South African energy system in line with the move towards a net-zero economy.

Among the targets, the roadmap plans to have 10 GW of electrolysis deployed and at least 500 kt of hydrogen production per year by 2030; the capacity will increase to 15 GW by 2040. On the demand side, the short-term focus is on the transport sector and on demonstrating industrial technologies, while for the long-term the roadmap envisions sector coupling and use of hydrogen also in the power sector. This could create more than 30 000 jobs annually by 2040, the HSRM says.