Africa destined for hydrogen

Africa could capture up to 10% of the global green hydrogen market, helping to create up to 3.7 million jobs and adding as much as US$120 billion to the continent’s gross domestic product (GDP), the report says.

According to the report “Africa’s Green Energy Revolution: Hydrogen’s role in unlocking Africa’s untapped renewables,” produced with analytical support from McKinsey & Company, Africa’s abundant solar and wind resources could be used to produce 30 to 60 million tonnes per annum (mtpa) of green hydrogen by 2050, or about 5 to 10% of global demand.

The analysis concludes that an African hydrogen sector with that level of production capacity will probably generate 1.9 to 3.7 million jobs and increase GDP by up to US$60 to 120 billion by 2050.

“This research provides a framework for African countries to ensure sustainable, low-carbon growth while extending energy access across the continent,” said Mohamed Jameel Al Ramahi, chief executive officer of Masdar. For nations in the Middle East and North Africa, green hydrogen has the potential to cut emissions, open up economic opportunities, and create brand-new, high-paying jobs.

Masdar has always understood the promise of green hydrogen and made investments as early as 2008. We anticipate working closely with our African partners to optimize the numerous, attainable benefits of green hydrogen identified in this research, given the numerous green hydrogen projects currently under construction across the world, including a number in Africa.

The report indicates that with a cost of US$1.8 to 2.6 per kilogram (kg) in 2030 and a further drop to US$1.2 to 1.6 per kg by 2050 as hydrogen production technology develops and renewable energy costs continue to fall, Africa could be among the most competitive sources for green hydrogen in the world.

The paper notes that Africa’s energy exports via green hydrogen and derivatives will reach 20 to 40 mtpa by 2050 and indicates that the continent is best positioned to develop an export-oriented hydrogen sector due to its proximity to demand hubs in Europe and Asia.

The remaining 10–20 mtpa would be used to meet domestic hydrogen demand, assisting in the electrification of African communities and bringing about additional socioeconomic advantages such as a more sustainable energy grid, increased access to clean energy, and a decreased reliance on fossil fuel imports.

Mohammad Abdelqader El Ramahi, the director of asset management and technical services at Masdar, stated: “Scaling up green hydrogen is a potential to not only develop a strong worldwide export sector on the African continent but also to expedite the deployment of renewable energy generally. The grid-connected renewables that are used to produce green hydrogen can feed electricity into the grid to give accessible, cost-effective clean energy to underdeveloped regions, particularly in Sub-Saharan Africa, where the average electrification rate is only 48%.

According to the analysis, between 1,500 and 3,000 terawatt hours (TWh), or more than 50 times Africa’s present total solar and wind energy production, would be needed to enable a production on the order of 30–60 mtpa. The renewable energy sources required to produce the hydrogen would receive the lion’s share of the investments (US$320-610 billion), followed by electrolysis plants (US$115-220 billion). The majority of the cash required for export projects is anticipated to come from foreign investors, the report states.

Along with investments, the report suggests six major areas for action, including the creation of an integrated master plan, governance, international coordination, and mobilization, frameworks for regulating hydrogen exports, infrastructure investments, locating and developing highly skilled labor, and the use of project de-risking mechanisms.

A variety of projects involving the creation of green hydrogen are actively being worked on by Masdar, one of the top clean energy businesses in the world. Aiming for an electrolyzer capacity of 4 gigawatts by 2030 and an output of up to 480,000 tonnes of green hydrogen annually, Masdar and Egypt’s Hassan Allam Utilities signed agreements in April to collaborate on the development of green hydrogen production plants in the nation.