Minister Outlines the Potential Of the South African Green Hydrogen Economy

The Hydrogen Economy is a potential “game changer” not just for South Africa, but for the world at large; and South Africa is well positioned to capitalise on the rapidly-developing global hydrogen economy, to reindustrialise the country and to become an exporter of cost-effective green hydrogen to the world.

This was said by Minister Ebrahim Patel, Minister of Trade, Industry and Competition, at the 2nd Renewable Hydrogen and Green Powerfuels Webinar, co-hosted by the British High Commission to South Africa.

Minister Patel highlighted to an audience of 2 000 participants the steps that had been taken in South Africa to support the development of the green hydrogen economy, including the start of production of fuel-cells by a global firm that set up a factory in the Dube Trade Port in Kwa-Zulu Natal. He announced that the Industrial Development Corporation (IDC) would lead the commercialisation of green hydrogen efforts, working with the Department of Science and Innovation.

South Africa’s rich endowment of renewable resources for solar, wind and biomass power generation, Fischer-Tropsch (FT) technological capabilities, skills, and access to platinum resources places the country at an advantage for developing the green hydrogen value chain and being a key supplier into the global hydrogen market.

In addition to optimal environmental conditions, South Africa is well-endowed with the key ingredient critical for the hydrogen economy – platinum group metals (PGM’s) – PGM’s are used in the electrolysers needed to produce green hydrogen and as a fuel in hydrogen fuel-cell electric vehicles.  South Africa has more than 80% of the world’s platinum reserves and is home to the largest platinum mining companies in the world.

The start of South Africa’s involvement in the Hydrogen Economy dates back to 2008 when Hydrogen South Africa (HySA) was officially launched by the Department of Science and Innovation (“DSI”). The vision of HySA was to use local resources and existing knowledge to create knowledge and human resource capacity, enabling the development of high-value commercial activities in hydrogen and fuel cell technologies.

“Today we stand on the brink of a new development in our efforts to bring cheaper, more accessible energy solution to the world, in the form of hydrogen. The aim is to create a sustainable local manufacturing sector for hydrogen production and PGM based fuel cells by beneficiating SA PGM minerals through appropriate mechanisms that can support a local and global market,” Minister Patel said.

The dtic has supported fuel cell demonstrations and component production, including the establishment of fuel cell manufacturing capability at the Dube Trade Port. The approximately R150 million investment, has created a manufacturing facility with an initial capacity of 1 500 fuel cells per annum. The company has further in collaboration with Invest SA, started the process of localisation, with initial local suppliers, which include printed circuit board assemblies, wire harnesses (leveraging automotive industry), pressure tank, sheet metal, manifolds and vacuum formed ducts identified for inclusion in the supply chain.

A proposed Springs Fuel Cell Hub, linked to the Gauteng Industrial Development Zone, is currently undergoing an environmental impact assessment. The intention is that this initiative will build on current partnerships and skills capacity leveraging the existing supporting infrastructure for fuel cell manufacturing and deployment. The Springs location offers access to PGM’s from surrounding refineries, existing hydrogen pipelines, metal and engineering suppliers as well as established transport and logistics services.

To support a focused effort on the opportunities in green hydrogen, Minister Patel also announced that the Industrial Development Corporation (IDC) will be the commercialisation champion for the hydrogen economy, linked to the Hydrogen Society Roadmap developed by the Department of Science and Innovation.

The IDC was critical originally in the development of SASOL’s world-beating coal-to-oil technologies; and the more recent emergence of SA’s renewable energy independent producer programme, with an exposure of R14 billion in renewable energy.

“The IDC’s business model will incorporate the integration and enhancement of project development activities including the creation of a focused Industry Planning and Projects Unit”, he said.

As part of this, the IDC will drive the development of an industrial plan aligned to the Roadmap I spoke of, to coordinate the efforts in developing the hydrogen economy.

The IDC will focus on identifying investment opportunities that will be progressed to enable pilot projects to be implemented in the short term. It will promote public/private sector linkages that will be critical to the development of (and extraction of value from) the entire green hydrogen value chain.

The IDC have further been mandated to actively partnering with the private sector in funding opportunities across the green hydrogen value chain, with a view to stimulating early adoption and creating traction so as to fast-track the development of a viable and inclusive local Green Hydrogen Economy.

“The way we power the world is changing. Through the centuries, and as our technologies have developed, we have turned to wood, to coal, to oil, to water, to nuclear fission and to the sun and wind to power our communities and our industrial endeavours. Today we stand on the brink of new development in our efforts to bring cheaper, more accessible energy solution to the world, in the form of hydrogen. If the 20th Century becomes known as the century of crude oil (and nuclear energy); the 21st Century may become known as the century of renewables and hydrogen,” Minister Patel said.

The government is committed to working with all stakeholders to advance the development and creating an enabling environment for the development of this new industry. Together with our collaborative partners, we will continue to support the development of the hydrogen economy and fuel cell manufacturing capabilities. As countries reconstruct their economies post Covid-19, renewable technologies will play a critical role,” he said.

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