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- Nine green hydrogen projects will be gazetted this week as Strategic Integrated Projects that can be fast-tracked.
- South Africa has over R300 billion in green hydrogen projects in the pipeline, but many of these need more work to reach financial close.
- The country is hosting its inaugural green hydrogen summit this week.
- For more financial news, go to the News24 Business front page.
Nine green hydrogen projects will receive priority status this week, which means they will be fast-tracked, said Public Works and Infrastructure Minister Patricia de Lille.
The minister was speaking at South Africa's inaugural green hydrogen summit, which officially started on Tuesday. The summit is an opportunity for South Africa to market itself as a large-scale, low-cost green hydrogen production hub.
De Lille's department and Infrastructure South Africa oversee infrastructure projects in South Africa and have taken steps to reduce red tape and expedite processes to get them off the ground as an imperative for economic growth.
Green hydrogen is one of the infrastructure sectors being developed. Green hydrogen involves using renewable energy for its production – as opposed to fossil fuel-based power, which is carbon-intensive and incompatible with climate commitments to limit global warming.
For this reason, green hydrogen is seen as an alternative, cleaner fuel for industrial processes such as steelmaking or the mobility sector, such as aviation, which release a lot of emissions. Green hydrogen would help the country keep to its climate commitments and remain globally competitive as its trading partners, like the EU, will place penalties on products with a high carbon content.
But to avoid being left behind, South Africa aims to position itself as a leader of green hydrogen globally and the investment destination of choice for these projects. Addressing the conference, President Cyril Ramaphosa said that green hydrogen had huge potential to support economic growth, investment and job creation. South Africa has been working on green hydrogen research and innovation since 2007.
Ramaphosa said that a number of products can flow from the sector, such as the production of fuel cells, green steel, sustainable aviation fuels, green ammonia and fertiliser.
Green hydrogen has also been identified as one of the three key focus areas of South Africa's Just Energy Transition Investment Plan. Ramaphosa said government wanted to enable more investment in the sector, as it would have knock-on gains for employment.
Nine priority projects
There are over R300 billion green hydrogen projects in the pipeline, but many of these require more work to achieve financial close, explained De Lille.
Nine projects have been identified for gazetting as Strategic Integrated Projects (SIPs) in terms of the Infrastructure Development Act of 2014. These projects form part of the Green Hydrogen National Programme – of which there are 19 in total.
The nine projects will follow an expedited path to get all their approvals or authorisations for their implementation because they will be classified as SIPs. The identified projects have gone through "extensive quality assurance" processes and are aligned to the country's overall plans and policies for economic growth, De Lille explained.
READ | SA's new green hydrogen projects get funding from Germany
Among the nine include the Prieska Power Reserve in the Northern Cape – valued at R9.7 billion. This project will produce green hydrogen and green ammonia in 2026, using renewable solar and wind energy, De Lille said. "This will be done in combination with the natural resources of water and air, located outside of Prieska in the Northern Cape."
The project, which was founded by black-owned, women-led Makhlako a Phala – in partnership with the Central Energy Corporation and the Industrial Development Corporation – is located in the Siyathemba Local Municipality in the Northern Cape.
During its first phase, it is expected to create more than 10 500 jobs over its construction and operation phase.
"The Prieska Power Reserve Project will create jobs during the construction phase as well as permanent jobs during the operational phase," De Lille said.
Another of the projects is based in Boegoebaai in the Northern Cape. It is a collaboration between the petrochemical company Sasol and the Northern Cape government. Last year the parties entered into a Memorandum of Agreement for a feasibility study on the green hydrogen potential in the region. Boegoebaai could be a green hydrogen and ammonia production and export hub.
The project could potentially produce 400 000 tonnes of hydrogen per annum, which will require renewable energy of about 9GW, Sasol's executive vice president for its energy business, Priscilla Mabelane, said last year. It could also create up to 6 000 direct jobs.
Two other Sasol projects also form part of the Green Hydrogen National Programme.
They include the Sasolberg Green Hydrogen project, located in the Free State, which will require 60MW of renewable energy. Engineering News previously reported that up to five tons of green hydrogen could be produced a day.
The other is HyShiFT, a consortium of which Sasol is part in developing sustainable aviation fuels in Secunda. The other partners in the consortium are German-based renewable energy company Enertrag and chemicals company Linde.
READ | UK to back SA's green hydrogen plans with grant funding
Another project to be prioritised is by UK company HIVE Energy – which will build a $5 billion (~R85 billion) green ammonia plant in the Coega Special Economic Zone in the Eastern Cape. It would produce 780 000 tonnes of green ammonia per year.
The Hydrogen Valley Programme – which stretches between three hydrogen hubs in Limpopo, Gauteng and KwaZulu-Natal - is also to be fast-tracked. The Department of Science and Innovation and the South African National Energy Development Institute partnered with Anglo American Platinum, fuel cell producer Bambili Energy and French energy company ENGIE to conduct a feasibility study on the valley, which was released in October 2021. It showed that green hydrogen could power different industrial activities, mining and even the mobility sectors across the valley.
The country's Hydrogen Society Roadmap also indicated the valley would contribute between $3.9 billion (R66 billion) to $8.8 billion (R150 billion) to the country's GDP by 2050 and create between 14 000 to 30 000 jobs per year. De Lille said the Hydrogen Valley consists of nine projects across the three provinces.
The remaining priority projects are the Ubuntu Green Energy Hydrogen Project, Upilanga Solar and Green Hydrogen Park, both in the Northern Cape and the Atlanthia Green Hydrogen project in the Western Cape.
All nine projects have successfully been registered with Infrastructure South Africa, De Lille said.
The remaining 10 green hydrogen projects that form part of the national programme still need to submit final project information to Infrastructure South Africa, De Lille said. These include the Saldanha Bay green hydrogen project and green steel production at ArcelorMittal mothballed plant in the same region.
The summit continues on Wednesday.
*All amounts based on the exchange rate on 29 November 2022.
