Africa Explores Vast Clean Hydrogen Potential

(Reuters) — The launch of the Africa Green Hydrogen Alliance (AGHA) by Kenya, South Africa, Namibia, Egypt, Morocco, and Mauritania came on the same day that the European Union published its ‘REPowerEU Plan’ to accelerate renewable energy deployment and end its reliance on Russian oil and gas.

The simultaneous arrival of the two initiatives shows that Africa may play a role in Europe's drive for greater energy independence and a dramatic reduction in carbon emissions.

The European plan includes strategies to develop a clean (green) hydrogen network and by 2030 it aims to produce 10 million tons (MT) per year domestically and import 10 MT.

Africa could be a key supplier, especially northern countries.

“North Africa is ideally placed to help serve the growing European demand, leveraging on existing bilateral energy relations, exceptional solar irradiation conditions, existing export infrastructures (including port terminals), and new pipeline connection projects for the 2030s," consultants Deloitte said in their 2023 Global Green Hydrogen Outlook report.

North Africa will have "12 MT of pipeline capacity availability from 2035,” the report said.

Falling costs and wide availability of renewable energy means many developing economies, such as those in the African continent, could produce clean hydrogen at one-quarter the cost of European production, according to the consultant.

By 2050, four regions worldwide will account for almost half of global hydrogen production and 90% of trade, Deloitte predicts, predicting North Africa’s export potential at 44 MT of hydrogen, or derivative equivalent, followed by North America (24MT), Australia (16MT) and the Middle East (13MT)

Sub-Saharan Africa and South America make up the other 10% of traded volumes, the analysis said.

Export revenues from the African continent could top $110 billion by 2050 as it captures almost 40% of trade revenues, more than 10 times its share in total market size.

Ideal conditions

Africa’s massive stretches of unclaimed, sunbaked land make it ideal for setting up large scale renewable projects, with more than 80% of territory in Algeria, Morocco, and South Africa available for development compared to less than 10% in Japan and South Korea, Deloitte says.

Africa is one of the world’s largest and least populated continents, making large-scale renewable energy deployment more feasible than in more densely populated regions.

Relatively low industrial development means Africa’s move toward emission-free energy generation leapfrogs some of the larger environmental missteps made by more economically developed nations. In much the same way, African telecommunications jumped land lines and went straight to mobile networks.

“For many African countries, the question is not how to reduce their carbon footprint, because the continent’s overall contribution to global GHG (greenhouse gas) emissions is already low at less than 4 per cent,” United Nations’ Office of the Special Adviser on Africa (OSAA) cluster lead for Energy and Climate Bitsat Yohannes wrote in a post in the UN’s ‘Africa Renewal’ magazine.

“Instead, we must examine how the continent can sustainably harness its existing resources to meet the growing demand for energy needed for economic development and to lift citizens out of poverty, while following a sustainable path to a net-zero future.”

Accelerated development

The push toward clean hydrogen could enable African countries to become more energy independent, and promote zero-carbon industrialization. This would create both economic growth and new jobs, as well as enabling and accelerating renewable energy deployment across the continent, a Green Hydrogen Organization (GH2) and Race to Zero study noted.

AGHA’s clean hydrogen ambition of 30 to 60 MT a year could add $66-$126 billion to the gross domestic product (GDP) of its members in 2050, equivalent to 6%-12% of the AGHA’s GDP, as well as creating 2 to 4 million new jobs, according to GH2’s ‘Africa’s Green Hydrogen Potential’ study.

Harnessing this potential could unlock competitive and decarbonized growth across the continent and beyond and unlock 1 trillion euros ($1.1 trillion) in investment, according to a joint study by the European Investment Bank (EIB), African Union, and the International Solar Alliance.

“The exciting thing with green hydrogen is as you scale up the investment it remains commercially attractive and, in the end, profitable,” one author of the EIB report says. “In the past that hasn't happened because there hasn't been a business case, whereas here, within the energy sector, it makes sense.”

The 2035 goal of 50 MT will arise from capturing Africa’s massive solar energy resource, which the EIB sees as 1,230 GW new solar energy generation across four hubs; Mauritania, Morocco, southern Africa, and Egypt.

The clean hydrogen industry will help decarbonize Africa’s heavy industries of steel, fertilizer, mining, and transport through the annual production of some 140 MT of clean steel and 160 MT of clean fertilizer while producing and distributing some 3,800 million cubic meters of clean, fresh water, up to 5% of domestic needs.

If such potential was realized, clean hydrogen could be produced at less than 2 euros per kilo, the EIB says, making the continent an important competitor in international energy markets.

Africa’s potential will be, arguably, as important for Europe as it is for the continent itself.

“From an economics point of view, the whole premise behind us getting involved in Africa is that they can do it at a cost that nobody else can. They can produce renewable power in quantities that we will never be able to and that makes it important for us,” another author of the EIB report says.

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