A R105 billion green hydrogen and ammonia project has just finished predatory in the Eastern Cape.
According to the Business Times, the project by Hive Energy UK at the Coega Special Economic Zone (SEZ) outside Gqeberha is the biggest investment of its kind in the world.
The project is expected to add 14,400 MW to the grid and create 20,000 jobs while creating downstream industries, such as solar panel manufacturing, when it becomes operational in 2028.
The project aims to create 900,000 tons of green ammonia, which will be exported to Japan, Korea and Europe. The ammonia is used to store green hydrogen, extracted via electrolysis from renewable energy sources – hence the term “green”.
Green hydrogen investments in South Africa have received major investment, with Japanese investors involved in the Coega SEZ project.
Earlier this year, state-backed firms from the Netherlands announced they would create a $1 billion green hydrogen fund for investment in South African projects.
Speaking at the recent Green Hydrogen Summit in Cape Town, President Cyril Rampahosa said the industry could create 370,000 jobs and reduce the nation’s emissions by roughly 10% and 15%, respectively.
South Africa could also benefit from holding roughly 80% of the world’s platinum group metals (PGMs) and 40% of the world’s platinum and palladium supplies, which are key for hydrogen production.
Hence, Anglo-American Platinum’s involvement in bringing a green hydrogen-powered electric BMW to South Africa.
The major problems
However, Bruce Young from the African Energy Leadership Centre at Wits Business School said there are several issues with green hydrogen.
Firstly, the creation of green hydrogen is incredibly small, with most hydrogen coming from the more carbon-intensive grey and black hydrogen varieties.
In addition, green hydrogen needs to be converted into higher energy-density products like ammonia to transport over long distances and be cost-effective.
Also, hydrogen’s “green merits” are questionable, as it is prone to leakage by being the smallest molecule in the world. If it leaks into the atmosphere, it can act as an indirect greenhouse gas, worsening global warming.
The industry will also take decades to scale up, with mega-green production plants requiring billions of dollars in capital costs.