Hydrogen demand will exceed supply by 2030, making now a good time to invest.
Green hydrogen’s ability to store renewable energy makes it transportable. Work is underway to discover a means to transport liquified green hydrogen over great distances without altering or reprocessing it.
Southern Africa, which has favorable circumstances for renewable energy generation, will be able to store and export renewable energy, according to a recent Kearney study.
Southern Africa is positioned to become a green hydrogen export hub due to its low demand, favorable production climate, and low transit costs.
Five actions can help market entrants build green hydrogen plants in Southern Africa.
- Get government backing for a favorable regulatory environment
Government buy-in and a well defined green hydrogen strategy effect market entrants’ success. Governments make policies that affect the speed and direction of the energy transition and provide the regulatory environment that promotes production facility development and investment attraction.
- Form public-private partnerships to de-risk initiatives.
Due to the market’s youth, every new development will entail project and operational risks, making it harder to get funding for the project and any off-takers. Market entrants need public, off-takers, and technology partners to attract funders and off-takers.
- Overcome infrastructural constraints, seize opportunities
Any huge project needs amenities. Green hydrogen projects, such as certain gigascale projects, require huge geographical tracts to produce renewable power.
- Finance
As with any megaproject, getting appropriate money for emerging, risky technology is difficult. Multi-source funding is typically needed. Kearney’s market sensing analysis of the Southern African renewables ecosystem revealed the primary investor archetypes, each with a unique value proposition, risk appetite, and return on investment expectation.
- Promote just energy transition
Carbon dominates Southern Africa’s energy mix. South Africa’s electricity is 90% coal. The transition to a low-carbon economy threatens 150,000 jobs in the coal value chain.
