South Africa’s hydrogen hub: A corridor of opportunity

Johannesburg platinum mine
Johannesburg platinum mine. Image: Sunshineseeds ©

Pamela Largue highlights how ENGIE Impact is planning a hydrogen valley that could transform South Africa’s energy landscape.

A feasibility study is underway in South Africa to explore how to create hydrogen hubs through expedited innovation and public private collaboration.

ENGIE Impact is conducting the study, which is being led by Nicolas Lefevre-Marton, managing director of Sustainability Solutions, and project director Vincenzo Giordano.

ENGIE Impact is the sustainability advisory arm of ENGIE and according to Nicolas Lefevre-Marton, “greases the wheels of implementation, as it were, to drive decarbonisation”.

This article was originally published in Power Engineering International 4-2021.

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In terms of decarbonisation, South Africa certainly needs to move from ambition to action. The country’s power sector has been dominated by coal and plagued by blackouts since 2005 due to supply shortages.

Policy uncertainty and antiquated business models have also hindered progress and thwarted investment.

However, the tides are changing. In 2021, the government announced the private sector could build their own power plants of up to 100MW, removing the current bottleneck at the National Energy Regulator of South Africa and leading to an acceleration of investment in power.

Furthermore, in March 2021, an agreement was signed between South Africa’s Department of Science and Innovation, South African National Energy Development Institute, platinum producer Anglo American, ENGIE Impact and clean energy solutions provider Bambili Energy to conduct a feasibility study into several hydrogen hubs in an economic and transport corridor.

This collaboration follows the launch of the South African Hydrogen Society Roadmap in 2020, aimed at integrating hydrogen into the economy by capitalising on the country’s platinum resources and renewable energy potential to revitalise and decarbonise key industrial sectors.

Mapping the hydrogen hubs

The first step of the feasibility study is for ENGIE Impact to identify tangible project opportunities to build hydrogen hubs in this key economic and transport corridor.

The project’s objective is to identify up to three hydrogen hubs – zones with a high concentration of hydrogen demand, with access to green hydrogen – acting as a hydrogen ecosystem.

Lefevre-Marton explained that ENGIE is working to identify concrete short term opportunities to develop hydrogen, while looking at the notion of a hub.

The team also wants to understand how to foster a demand and supply dynamic in the same geographical area to improve economics and business case, identify the policy actions needed to make this project materialise and create a coalition dynamic to generate interest from different actors.

A public private affair

Vincenzo Giordano makes it clear that the South African hydrogen hub is a great example of how to bring public and private actors together to develop a large scale hydrogen project that will ultimately boost the local economy.

Said Giordano: “On this type of project, the number one lesson is that you don’t develop a hydrogen economy all by yourself – collaboration is at the heart of this.

“It’s all about creating the right ecosystem of actors to create the demand for hydrogen, then the supply side can develop.

“Of course, when you are creating something new, there is always a bit of resistance. However, public and private actors seem to be considering this project with a positive mindset, having recognised that they need each other and that no one can do it alone.”

The feasibility study and collaboration with Sanedi and DSI is creating a vision, and is something that people and organisations can buy in to, explains Giordano.

“The interviews are being conducted with a variety of industrial and mining companies; and in fact, even sugar cane companies are expressing interest as they can produce surplus renewable electricity from biomass and contribute to producing hydrogen. “These interviews, together with quantitative assessments will provide a way of prioritizing applications”.

Even though an exact timeline from government is currently unclear, all stakeholders, private and public alike, are showing a strong appetite and looking to get this project off the ground as soon as possible, especially in light of South Africa’s goal to halve its emissions by 2030.

South Africa’s platinum potential

According to Lefevre-Marton, hydrogen is of strategic importance to South Africa’s energy landscape.

In his 2021 State of the Nation address, President Cyril Ramaphosa made it clear that the hydrogen economy presents an opportunity for South Africa to leverage its platinum resources to develop a domestic hydrogen economy valued at up to $10 billion per year, and to tap into export potential of $100 billion per year.

Platinum is a key component in the manufacture of electrolysers, which creates a clear and positive reinforcement loop within the hydrogen supply chain.

It is due to the available platinum resources that the proposed hydrogen valley will stretch approximately 835km from Anglo American’s Mogalakwena platinum mine near Mokopane in Limpopo province in the north of South Africa, along the industrial and commercial corridor to Johannesburg and to the south coast at Durban.

The hydrogen valley will therefore be anchored in the metals-rich Bushveld geological area.

Within the valley, ENGIE is exploring off-grid renewable assets connected directly to the electrolysers to combat one of the main challenges in the area: the lack of electricity and grid reliability.

In the Mogalakwena mining area, a dedicated green hydrogen electrolyser will be established next to the mines to drive decarbonisation, and ensure power is readily available.

Industries in the mix

Mining giant Anglo American is already investing in the development of hydrogen-powered fuel-cell mine haul trucks and sees the regional Platinum Group Mines (PGMs) industry as central to such a hydrogen valley, with PGMs playing an important role both in Polymer Electrolyte Membrane (PEM) electrolysis used to produce hydrogen at scale and in fuel cells themselves.

In terms of hydrogen applications outside the mining sector, the study is also focusing on the feasibility within transport and along freight corridor. “Logistics and mobility are viewed as low hanging fruit and will achieve decarbonisation objectives relatively quickly,” says Giordano.

ENGIE is therefore hosting conversations with the mobility sector, such as heavy duty truck companies, port operators, mining vehicle companies, rail operators, and bus manufacturers.

Public buildings and data centres, the chemical sector, iron and steel, cement and aluminium companies are also included in the study.

Giordano says: “We are considering opportunities for the valorisation of hydrogen and derived alternative fuels both in the domestic market and for export.

“On the export side, it is important to consider which SA ports would be more suitable for export.

“In our study we are looking into the potential of the Richards Bay port to serve as an export hub, but there are other ports outside the perimeter of our H2 valley that could be good – or better – alternatives; such as Saldanha Bay, Ngqura, Boegoebaai. Investigation is ongoing.”

Currently, the plan is to ensure a number of pilots are fully functional by 2030 and from there, other activities will be developed.

Hubs around the world

The hub concept, although deployed somewhat differently around the world to accommodate regional requirements, can be seen as a kind of hydrogen development blueprint.

Lefevre-Marton explains that all these pilot projects study the economic potential for hydrogen hubs in a given region.

They are all co-funded by public and private actors, thereby emphasising the common theme of collaboration.

He adds: “These hubs offer two main merits; namely, ensuring sufficient demand to allow economies of scale and build supply and demand in close proximity, thereby avoiding unnecessary transport costs, which makes it more competitive”.

Currently, ENGIE Impact is working on hydrogen pilots around the world, such as in Portugal, for a single hub of more concentrated industrial actors, as well as investigating industrial clusters in the UK.

Hydrogen’s vision

The advantages of these hubs are salient, especially in decarbonising hard-to-abate sectors; however, some countries are notorious for having sticky legislative frameworks that are a challenge to navigate.

“Ultimately, the vision created by the study is used to align the government and private sector by showing all actors the commercial and environmental opportunities,” says Giordano. “Policy adjustments become possible when governments understand the benefits.”

Lefevre-Marton makes the comparison to the renewables growth over the past decade. When renewable energy first began to gain momentum, naysayers were common and regulations were restrictive.

However, as the LCOE went down, regulations shrank and renewable energy became ubiquitous.

“It’s not an easy process: it requires heavy investment to get the costs down – as was seen in the development of the renewables industry. However, once you start gaining momentum, it will speed up”. He adds that the hydrogen hub pilot projects will encourage more rapid growth of hydrogen innovation and adoption, causing a development leapfrog that renewables could have only dreamt of.

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