The Eastern, Northern, and Western Cape provinces of South Africa have joined forces to propel the nation into the global spotlight as a major producer of green hydrogen and its derivative products.
This collaboration aims not only to harness the potential of green hydrogen but also to bolster the manufacturing of components required in the green hydrogen value chain. Together, these provinces are spearheading a sustainable energy revolution with a focus on green hydrogen.
These coastal provinces have already been independently fostering multi-billion-rand green hydrogen projects, each envisioning a future where clean hydrogen fuels industries and drives economic growth. However, they now recognize that cooperation, rather than competition, can unlock even greater potential, especially in infrastructure development, skills enhancement, trade facilitation, and policy formulation. This unified effort has been formalized in a memorandum of understanding (MoU), a significant step towards harnessing the green hydrogen revolution’s full potential.
The signing of this trilateral MoU comes at the occasion of South Africa’s second Green Hydrogen Summit in Cape Town, demonstrating a commitment to tangible progress in the green hydrogen sector. This agreement follows a similar accord between the Western Cape and Northern Cape governments in 2022, and it has since been accompanied by the advancement of their individual green hydrogen strategies.
The Western Cape: A Green Hydrogen Production Hub
The Western Cape is leading the charge in developing Saldanha Bay into a green hydrogen production center. Saldanha Bay, with its established deep-water port and industrial capabilities, is poised to manufacture green hydrogen and its derivatives like green direct reduced iron. Moreover, the region plans to produce bunkering fuel for the shipping industry.
The Atlantis Special Economic Zone within the Western Cape province is envisioned as a key hub for manufacturing components necessary for the green hydrogen value chain. This includes components related to wind, solar, and electrolysis technologies. These ambitious projects are set to transform the region into a global leader in sustainable energy production.
The Promise of Green Hydrogen
Green hydrogen, produced by using renewable electricity to split water into hydrogen and oxygen, holds immense promise. This clean energy carrier is central to decarbonizing sectors that cannot readily shift to renewable electricity, such as steel, petrochemicals, fertilizers, cement, and long-haul land, sea, and air transportation.
The Northern Cape, with its abundant sun, wind, and land resources, is expected to attract between $300 billion and $500 billion in green hydrogen investments by 2050. The province is actively developing projects, including the greenfield port of Boegoebaai, positioned just south of the Namibian border. This port could emerge as a flagship hub for green hydrogen production and export.
The Eastern Cape’s strategy primarily focuses on the Coega Special Economic Zone, where Hive Hydrogen is considering a significant 1.07 GW investment to produce green hydrogen and green ammonia for export. These initiatives underline the transformative potential of green hydrogen across different provinces.
A Comprehensive Strategy
While the official Green Hydrogen Commercialisation Strategy is still under development, key stakeholders are confident about its eventual approval. The strategy aims to adopt a systems approach to ensure all aspects of a green hydrogen industry, including the value chain, are well-considered. This comprehensive approach seeks to maximize the social, economic, and trade benefits for South Africa.
Notably, the green hydrogen opportunity extends beyond the three coastal provinces, encompassing regions such as the Free State and Mpumalanga. These areas are looking to displace grey hydrogen produced from coal with green hydrogen to create sustainable aviation fuels and other products.
The Green Hydrogen Commercialisation Strategy will be designed with both a strong domestic and an export component. The export market is seen as a critical driver for the green hydrogen sector. It’s not only about exporting surplus electrons to decarbonize partner markets but also about capturing the price premiums available in global markets to accelerate the growth of a commercial-scale green hydrogen industry within South Africa. This, in turn, offers an opportunity for decarbonization and re-industrialization within the country’s heavy industries.
As these three provinces forge ahead with their ambitious green hydrogen plans, the rest of the world watches with anticipation. The green hydrogen revolution is not just an environmental imperative; it’s a pathway toward economic growth and innovation, solidifying South Africa’s role as a future leader in sustainable energy production. This cooperation between provinces is a giant stride toward achieving these goals.
