South Africa is keen to explore green hydrogen as part of its Just Energy Transition Implementation Plan.
This plan focuses on new energy vehicles, green hydrogen, and sustainable electricity. Global trends show that only a small percentage of green hydrogen projects are currently realized. Given these challenges, South Africa faces a significant journey to make its green hydrogen ambitions a reality. The global status shows that although projects have increased, reaching a capacity of 422 gigawatts, only a small fraction have been operational. This slow progress is primarily because green hydrogen remains costly. Researchers from the Potsdam Institute for Climate Impact Research highlight that high electricity prices and expensive electrolyser investments contribute significantly to its costs. Without competitive pricing systems like carbon pricing, substantial subsidies would be needed to support the projects.
The Just Energy Transition Investment Plan suggests that engaging in green hydrogen exports and derivatives could significantly increase GDP and create jobs.
Since announcing its focus on green hydrogen, South Africa has made significant strides. The Industrial Development Corporation of SA and other institutions have secured funding from German and Dutch governments to facilitate key projects. Other accomplishments include pre-feasibility studies, skills assessments, signed agreements for supply, and environmental approvals. Despite these achievements, the high production cost remains a challenge.
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