Recent discussions at the Green Hydrogen Monitor launch in Windhoek have highlighted Namibia’s significant potential and the associated challenges within the green hydrogen industry.
Roman Grynberg, a senior research fellow at the Botswana Institute for Development Policy Analysis, raised concerns about the impact of ‘white hydrogen’ on the green hydrogen market. White hydrogen, potentially cheaper and more commercially viable, could threaten the burgeoning green hydrogen sector by undercutting prices and disrupting established plans.
Despite these concerns, Graham Hopwood, executive director at the Institute for Public Policy Research (IPPR), emphasized Namibia’s advantageous position for green hydrogen production. Citing the country’s favorable geographical and climatic conditions, Hopwood outlined the Namibian government’s Harambee Prosperity Plan II, which envisions green hydrogen as a key driver of economic growth and environmental sustainability.
Hopwood underscored the necessity of ongoing research and development to ensure the viability of green hydrogen technology. Establishing a robust policy and legal framework is crucial for fostering industry growth while ensuring environmental protection and social inclusivity.
Namibia hosts nine green hydrogen projects at various stages of development, with the Hyphen Hydrogen Energy project at Lüderitz being the most notable. A study by Oxford University engineers identified Lüderitz as an optimal location due to its strong winds and abundant sunshine, estimating ammonia production costs at approximately €5.4 per kg. However, despite promising projections, the high initial costs and financial risks associated with such large-scale ventures remain significant concerns.
The Hyphen project, expected to be operational by 2026/27, faces uncertainties in production costs. The project’s commercial viability hinges on securing substantial financial backing and guaranteed buyers from European and Asian markets. The reliance on subsidies from developed countries adds a layer of political risk, as shifts in international priorities could jeopardize project funding and overall viability.
Green hydrogen’s current high prices are subsidized by the European Union (EU), the United States, and Japan. These subsidies aim to support decarbonization efforts and reduce reliance on fossil fuels. However, political changes, such as the election of climate change skeptics, could threaten these subsidies and, consequently, the feasibility of green hydrogen projects.
