Africa urged to balance green hydrogen exports and local industry development

July 17, 2023

Africa has the potential to become a major player in the global green hydrogen economy, with the potential to generate more than 1 000 GW of renewable energy and could produce up to 5 000 megatonnes of green hydrogen a year at less than US$2/kg, says business advisory company Frost and Sullivan Africa energy consultant Patrick Prestele.

Several African countries, including Morocco, Egypt, Namibia and South Africa, have launched initiatives and pilot plant projects to develop large-scale hydrogen production facilities.

The growth potential of green hydrogen presents significant opportunities for Africa. With abundant renewable energy resources, such as solar, wind and hydropower, the continent can produce vast amounts of cost-competitive green hydrogen for various offtaker markets and industries. 

“This presents a tremendous growth opportunity for the continent, as green hydrogen is expected to play a crucial role in the global energy transition going forward,” Presele says.

Africa's strategic geographic location favours its position as a hub for green hydrogen exports to global markets. However, there are concerns about Africa becoming a "battery" for the rest of the world.

 “If the continent heavily relies on exporting green hydrogen alone, it could miss out on the benefits of local value addition and industrialisation. Therefore, African countries must strike a key balance between exporting hydrogen and developing local industries that can benefit from this renewable energy source in the long-term,” he emphasises.

Further, green hydrogen production in Africa offers opportunities beyond the energy sector, for example by producing green hydrogen derivative products, such as green fertiliser, green ammonia and green steel, or feedstocks for other hard-to-abate industries, Prestele says.

“The concept of green hydrogen is gaining traction across the African continent, with multiple initiatives and pilot plant projects in development owing to the favourable renewable energy generation potential.

“However, with increased off-taker interest from the developed world, such as Europe and Japan, Africa must benefit from the local value addition and industrialisation by striking a balance between hydrogen exports and developing local industries,” he says.-MW

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