We are getting closer to realising the potential of green hydrogen in Africa.
Introducing the Africa Hydrogen Partnership
Including a broad range of stakeholders, hydrogen associations have emerged around the world to speed up the green hydrogen revolution and make it happen as efficiently as possible. AHP focuses on promoting green hydrogen in Africa and is committed to sourcing hydrogen produced from water by electrolysis powered by renewable energy. This ‘green hydrogen’ is clean to produce and to consume, with the only emission being water.
In early 2021, AHP started taking in members and only accepts corporate or institutional members (not individual members) but accepts members from anywhere in the world. AHP maintains that the world cannot decarbonise without green hydrogen from Africa, and believes that if the countries in Africa that are able to produce green hydrogen at a competitive cost can do so, then they will become significant energy producers which will revolutionise their economies. The realisation is fast gaining traction.
Matching Supply and Demand for Hydrogen
In 2022, the International Renewable Energy Agency (IRENA) published a world map showing the potential of various regions around the world for producing green hydrogen; and Sub-Saharan Africa is shown to have, by some margin, the best potential of all.
Historically, there has been a perception that a gap exists between supply and demand for carbon-free hydrogen, with both sides lacking ‘secure volumes’ from the other, and that this central problem needs to be overcome before large-scale commercialisation of green hydrogen can get underway. But the real issue is that the commercialisation of low carbon hydrogen will not be possible until green hydrogen can be sold at a competitive price (in relation to fossil fuels) and once this happens then the ‘chicken-and-egg’ impasse will disappear.
Once green hydrogen can be sold at a competitive price, supply and demand of the market will develop automatically. In the first instance, we will see this happen where green hydrogen can be provided at the right price for domestic consumption in Africa. At a later date, this will happen in relation to green hydrogen produced for export as well. Whether green hydrogen can be provided at a competitive price depends on where the green hydrogen is going to be consumed: broadly speaking, whether that price is equal to or less than the price at which fossil fuels are sold in the same place, while considering the cost of transportation.
Although it may not make economic sense to export large amounts of green hydrogen to Europe in 2022 (even assuming that the necessary infrastructure had been created) there are a number of scenarios where green hydrogen can be produced profitably and delivered in Africa for domestic consumption. For instance, in many parts of Africa green fertiliser locally produced from green hydrogen will be significantly cheaper than imported grey fertiliser made from natural gas. This is principally because of the high cost of natural gas and the high cost of transportation internationally and within Africa.
Making fertiliser more sustainable
Some of the best agricultural land in the world is in Africa but it is not as productive as it could be. Some of this is political, but it is also because the land is simply under-fertilised. As a continent, Africa is shockingly under-fertilised, in comparison to other parts of the world. For instance, the fertiliser per hectare of cropland in Africa is five times less than the global average. And because the inherent demand for fertiliser is already there, fertiliser plants in those parts of Africa should be capable of being financed and built today.
These fertiliser plants can use green hydrogen as a feedstock – rather than as an energy vector; and they will be able to produce green hydrogen for hydrogen-powered vehicles and green ammonia for ammonia generators. In 2022, some 600-700 million people in Africa are still not connected to the electricity grid. Ammonia generators could help provide much needed power for lighting and cooking in people’s homes. With time and in the right locations, green ammonia can be used for shipping or maritime purposes. In addition, baseload renewable power plants, using hydrogen to balance the intermittency of renewable energy, will also make financial sense, in some regions.
Spotlight on Somaliland and Tanzania
All of the required technologies are well established as the green hydrogen revolution begins to get underway, with new technologies and further improvements increasing competitiveness. The development of a new market only really starts with the development of a profitable business. This itself attracts new businesses into the sector and provides the funds for them to grow and develop. This thought was behind AHP’s delegation to Somaliland and Tanzania: to see what hydrogen-related businesses could be established in these countries today.
The delegation consisted of AHP members, which either together or separately have the capability to build green fertiliser plants in Africa and other facilities to meet existing needs in Africa, including baseload renewable energy and waste-to-energy hydrogen plants, as well as ammonia generators. Preliminary calculations and initial discussions were promising but there is no substitute for actually seeing and going to the countries concerned.
The wind and solar maps show that Somaliland had formidable onshore wind and solar but experiencing it in person was deeply impressive. Somaliland is a potential future hydrogen superpower, located in an increasingly key location. Yet Somaliland is a country where, due to the cost of fossil fuels, electricity is very expensive. Given this, Somaliland is an ideal country for green hydrogen to be deployed now.
Somaliland has a population of around 5 million people and is the size of England and Wales. Its immediate neighbour is Ethiopia with large fertile regions and a population of more than 110 million people. Tanzania has a population of more than 60 million people and large fertile areas in most of its political districts.
Tanzania is blessed with hydropower, geothermal energy and the potential for harvesting wind and solar energy. In central and western Tanzania there is a very strong potential for producing solar and onshore wind power – the least expensive renewable energy sources. Additionally, there are large open (arid) spaces in these regions which allow the construction of larger renewable energy facilities while minimising the impact on the environment. Tanzania is planning a major new Port at Bagamoyo, which has significant green hydrogen implications, as does the Port of Berbera in Somaliland.
The delegation made presentations and held discussions in Somaliland with the private sector, but in Tanzania most of our discussions were with senior officials (including the Minister of Foreign Affairs) and officials in Dar es Salaam, Bagamoyo and Zanzibar. In both countries there was great interest in developing hydrogen and several opportunities were identified and will be followed up by the companies involved, supported as required by the AHP. And when one or more sectors are underway, it will be possible to turn to other sectors which will then become more connected and attractive.
The East African Green Hydrogen and Fertiliser Corridor
East Africa has great potential for producing low-cost green hydrogen that will benefit its large populations as well as its strong domestic and agricultural sectors. For these socio-economic reasons, the AHP is focusing on creating a Green Hydrogen and Fertiliser Corridor for East Africa:
The Hydrogen Ecosystems involved will include:
- baseload renewable power supply using hydrogen
- green fertiliser production
- grid independent power supply
- maritime shipping sector
- mining, land transport, industry
The East African Green Hydrogen and Fertiliser Corridor will:
- use CO2 emission-free technologies
- develop East Africa as a highly productive agricultural region
- mitigate the risks associated with food shortages and related market risks
- support socio-economic development as well as the creation of jobs and wealth
We will achieve the first large-scale commercialisation of clean, sustainabile and renewable green hydrogen worldwide.
A corridor consisting of several neighbouring countries will allow developers to diminish their (national) risks and to interconnect the evolving hydrogen ecosystems in different regions of East Africa. Additionally, market and default risks will be reduced by working with green hydrogen programmes for a variety of market sectors, such as power supply using green hydrogen, green hydrogen as a feedstock for green fertiliser production or as a fuel for the maritime transport sector. Risk reduction will lead automatically to lower financing costs. Economically and commercially feasible green hydrogen and fertiliser business development opportunities already exist in East Africa now.