Green hydrogen Energy in South Africa: dream or danger?

South Africa

The world is currently searching for sustainable, efficient, and reliable green energy sources, due to the chaos caused by climate change and overall environmental degradation, exacerbated by geopolitical events. There is therefore an imminent need to harness a trustworthy green energy source to nurture healthy and resilient communities as well as ecosystems, and to help alleviate the global energy crisis in a sustainable manner.

The hunt for alternative sources of energy has also been accelerated by the importance placed on low to-zero-carbon emissions. One of the most promising alternative energy sources to gain popularity is green hydrogen. Green hydrogen is considered by the International Energy Agency as one of the leading options for storing energy from renewables and a crucial element in any economy’s clean energy mix, and hydrogen has been lauded as the “fuel of the future”.

With energy security rapidly becoming one of the most critical issues facing South Africa today as a result of continuous rolling blackouts, a growing gap in power generation capacity and electricity demand, as well as ageing infrastructure, the country is looking to hydrogen as a solution to its energy problems. In fact, South Africa aims to become a major producer and exporter of green hydrogen, with ambitions to capture a 4% global market share by 2050, as part of its commitment to decarbonise the economy, create economic growth, and pursue a just transition away from non-renewable energy sources like coal.

Owing to South Africa’s abundant renewable and mineral resources, the country is advantageously placed to benefit from the production of hydrogen. According to the National Business Initiative, the country could produce hydrogen for $1.60 per kilogram by 2030, one of the lowest costs worldwide, which could see it double its current share of global hydrogen production and reach its 4% goal. Additionally, the country aims to produce around 500 kilotons of hydrogen annually by 2030 as part of its Hydrogen Society Roadmap, which is forecast to create 20 000 jobs annually by 2030, while the Green Hydrogen Export Economic Zone announced by President Cyril Ramaphosa last October will serve as a future export hub with possibilities for export to the Asian market, particularly Japan.

Although hydrogen offers significant economic and environmental benefits for South Africa, if we are to pursue it as a serious alternative energy source, we must do so with open eyes, since it could lead to some major pitfalls if we do not.

A risky fuel to work with

Because of its incredibly high energy content, hydrogen gas is a highly flammable and volatile substance to work with and can cause fires and explosions if not handled properly. As it is a colourless, odourless, and tasteless gas, any dangerous leaks would also be particularly difficult to detect.

Unlike natural or propane gas, odorants cannot be added to hydrogen to help detect and prevent leaks as it is a light gas. Hydrogen fires are also invisible to the naked eye, so whenever a leak occurs, it may be difficult to detect and contain flames.

This presents a number of health and safety challenges that must be carefully and comprehensively considered and prepared for in any strategy, planning and construction of infrastructure related to hydrogen production.

Building new infrastructure would be costly

As there are currently no standardised distribution systems for hydrogen, building a new hydrogen pipeline network would involve substantially high initial capital costs.

Additionally, we would need to build completely new infrastructure to distribute hydrogen to consumers across the country which has the same capacity and reach as current petrol and diesel fuel stations, while hydrogen-powered cars are still too costly for consumers to purchase.

We are already facing significant, and expensive, infrastructural problems in South Africa across water, healthcare, roads and, most particularly, electricity. Spending significant amounts of capital to build new infrastructure for a new industry increases the economic burden on the country.

Storage and delivery is extremely difficult

Hydrogen is a much lighter gas than petrol or diesel which makes it difficult to store and transport. Storage requires compression into a liquid at extremely low temperature (253 degrees Celsius) within specialised containers. This opens more risks as liquid hydrogen could cause severe frostbite and even loss of extremities if it comes into contact with skin.

Additionally, the physical properties of hydrogen and the excessive amounts of pressure needed to store hydrogen make it a difficult and costly fuel to transport in large quantities by road or pipeline. For example, the European Hydrogen Backbone aims to build dedicated hydrogen transport infrastructure spanning 40 000 kilometres across Europe, which requires an estimated total investment of 43 - 81 billion Euros.

Not the silver bullet we think it is

Outside of costs, safety concerns and infrastructure challenges, hydrogen might not be as green as advertised if conventional methods are used to produce hydrogen. According to a recent study, hydrogen produced by the steam reforming of methane in natural gas (the current most common form of hydrogen production in the world, also known as blue hydrogen) is far from being low carbon as greenhouse gas emissions from its production are quite high. The study observes that the greenhouse gas footprint of hydrogen produced in this manner is more than 20% greater than natural gas or coal for heat, and some 60% greater than burning diesel oil for heat.

Also, the production of hydrogen fuel requires more energy than the fuel can provide. Basically, consuming higher electrical energy to produce hydrogen to in turn generate less electrical energy is not the smartest of ideas. It may in fact be wasteful.

Green hydrogen, on the face of it, is the answer for an emissions-friendly energy source. However, as it is very costly to produce and the difficulties of storing and distributing hydrogen remain, we must be aware of the challenges South Africa will face in its pursuit of hydrogen as an alternative energy source. We must therefore not be reckless in our thinking that hydrogen could be the panacea to all the energy problems in South Africa and in the wider world.

Written by Bridgett Majola, Banking & Finance Lawyer, and Partner; Gavin Noeth, Infrastructure & Projects Senior Consultant; and Pooja Pundit, Candidate Attorney at international corporate law firm CMS South Africa.