Scholz pledges greater investment in Africa’s green energy sector

November 20, 2023

BERLIN, Nov 20 (Reuters) – Germany will invest 4 billion euros in green energy projects in Africa until 2030, Chancellor Olaf Scholz said on Monday, noting these could in turn help Europe’s largest economy achieve its own transition to carbon neutrality.

Germany will need to import large quantities of green hydrogen going forward, including from Africa, if it is to achieve its goal of net zero emissions by 2045, he said at a German-African business forum in Berlin.

The forum preceded a summit of the “G20 Compact with Africa” that aims to drum up investment in the world’s poorest but fast-growing continent by coordinating the development agendas of reform-minded countries and identifying business opportunities.

“Hydrogen production requires considerable investment at the start, so clear signals for a long-term and durable cooperation are needed,” said Scholz, who has made five trips to Africa since taking office in late 2021 in a bid to increase engagement with the continent.

“The Compact with Africa conference aims to send this signal: You can count on Germany as a partner”.

The 4 billion euros would be channeled into the common EU-Africa Initiative for Green Energy. The European Union had already announced it would deliver it 3.4 billion euros in grants.

African countries have long complained that while Europe talks about investment, China actually provides financing without any moral lecturing. Still, Chinese lending in Africa is in decline, while European interest is rising.

Indeed the West is increasingly jostling with China and Russia for geopolitical influence, critical minerals and new economic opportunities in the continent.

“The global order is shifting and Europe and Germany can not just sit on the sidelines,” Finance Minister Christian Lindner said after meeting with his counterparts from several African countries at the conference.

The summit of the G20 Compact with Africa on Monday was its fifth since its creation in 2017 under the German G20 presidency and convened the leaders of more than a dozen African states.

German trade with Africa was 60 billion euros ($65.4 billion) last year, which is a fraction of its trade with Asia but up 21.7% on 2021.

Ivory Coast President Alassane Ouattara said the number of German companies had tripled in five years while Morocco’s Prime Minister Aziz Akhannouch said German investment had increased sixfold since 2015.

The member countries of the G20 Compact are Morocco, Tunisia, Egypt, Senegal, Guinea, Ivory Coast, Ghana, Togo, Benin, Burkina Faso, Rwanda, Democratic Republic of Congo and Ethiopia.

https://www.reuters.com/sustainability/climate-energy/scholz-pledges-greater-investment-africas-green-energy-sector-2023-11-20/

The 2023 Green Hydrogen Summit in South Africa

On 16 and 17 October 2023, Cape Town hosted the 2nd South Africa Green Hydrogen Summit. The Summit aimed to showcase South Africa’s potential as a green hydrogen producer and exporter. Natural Justice attended the Summit with H2 Watch, representing the interests of communities and Indigenous people, to voice concerns about South Africa’s rush to develop green hydrogen.

This development must not happen without adequate public engagement and dialogue about: who benefits, what the plans are for the roll out of Green Hydrogen (GH2), who will bear the environmental and social burdens and how those burdens could be avoided or minimized through robust public consultation and social and environmental safeguards. During the Summit, H2 Watch released a statement, supported by Natural Justice, which spoke to these concerns.

The Summit

The Summit was sponsored by Sasol, Anglo American, GIZ, BMW, Eastern, Western and Northern Cape Government, Industrial Development Cooperation, Siemens Energy, Engie and Development Bank of Southern Africa. This represents a sample of the types of companies and government entities that are seeking to invest in and profit from hydrogen production in South Africa. These companies and the government representatives steered and influenced the agenda of the Summit. Only two sessions spoke to the participation and impacts on communities.

Governments have been encouraging GH2 as a new fuel source, both for the export market and to power difficult-to-electrify sectors in South Africa, such as mining and heavy industry. In South Africa, Green Hydrogen facilities are being pushed urgently through the Green Hydrogen Commercialisation Strategy and in the locations of Boegoe Bay, Saldanha Bay, Vaal, eThekwini and Richards Bay. These projects are all at beginning phases.

Green Hydrogen – What is it

GH2 is produced through a clean process using electrolysers to split water molecules – but this is done with renewable energy – which is why it is considered “green”. At the Summit, one stand had a small example of the process of creating GH2. It burns cleanly, emitting only water vapor. It is an energy vector, or carrier, that can be used for long-term energy storage and then supply that energy later with no carbon dioxide emissions during combustion. There is also grey hydrogen made via a dirty process using fossil fuels like gas, oil and coal during the process, and blue hydrogen which is produced from gas with the use of capture and storage of carbon dioxide emissions.

Uses of Green Hydrogen

Green Hydrogen may be a game-changing solution for decarbonising heavy industries (i.e., cement and steel), shipping, heavy transport and mining. GH2 can also be a critical tool to balance the electricity grid with increasing shares of variable electricity generation from wind and solar. Too often, when there is excess solar and wind power generation on particularly sunny or windy days, the excess can’t be used or stored, so the grid operator requires the generator to turn off, or curtail, its electricity generation. That excess generation could be used to produce GH2 that then could be stored for future use.

Going forward

Concerns that must be addressed before South Africa goes further down the green hydrogen path

Green hydrogen will be used to justify grey and blue hydrogen

There is concern that governments and industry will push to continue the use of grey hydrogen and expand use of blue hydrogen to build the market for the much-hyped GH2 future. It is impossible to tell how hydrogen has been produced as a molecule of grey hydrogen looks the same as a molecule of green hydrogen. So, traceability, or guarantee of origin requirements, are critical. Without proper requirements, there is worry that major oil and gas companies will use green hydrogen to look environmentally friendly, while still continuing with fossil fuel-based hydrogen (what we call “greenwashing”).

IRENA stated that at the end of 2021, only 1% of hydrogen was produced with renewable energy with grey hydrogen being almost 99% of all hydrogen produced in the world. According to the IEA, in 2018, 76% of hydrogen produced was from natural gas and the balance was from coal. It’s important to underline that blue hydrogen is not a climate friendly alternative to grey – it produces only 9 – 12% less carbon emissions than grey hydrogen with higher fugitive methane emissions. (Methane is reported by United Nations Environmental Programme to be 80 times more potent in terms of a climate warming pollutant than carbon dioxide, during a 20 year timeframe.) There are serious concerns that plans for the GH2 future will be used as an excuse to expand the market for blue hydrogen in the near term, which would be bad for the climate and give a lifeline to gas production that is not economically viable, that is being outcompeted by renewable electricity generation.

As Bruce Buckheit states in the report “Deconstructing the Hype on Hydrogen Hubs”, the use of grey and blue hydrogen will result in higher carbon emission levels. Therefore, unless it is green hydrogen, hydrogen production is not a solution for energy transitions to lower carbon emissions.

Impacts on communities, the public, and South Africa’s energy crisis

Throughout the Summit, concerns were raised about diverting renewable energy generation from the grid to GH2 production – energy that could be used to lessen South Africa’s electricity crisis (including load shedding, or blackouts, and energy insecurity). Green hydrogen production requires energy and it takes more energy to produce green hydrogen through electrolysis than hydrogen produces when it’s combusted.

In terms of local communities and indigenous peoples, there are serious concerns about land and water. To produce vast quantities of GH2 requires a vast amount of renewable energy, and, in turn, a vast amount of land for solar and wind farms, for example. In South Africa, there has been a failure to redress land inequalities following the enactment of racial land legislation during apartheid. This has left many local communities with land rights insecurity. Green hydrogen’s need for land can threaten this land security further.

GH2 requires a vast amount of clean water – a resource which is scarce in South Africa and threatened due to climate change. Should local reserves of water be used, this will impact the access to water of communities. This includes communities in desert-like regions such as the North Cape. Should water be provided through desalination plants, fishing communities may be impacted by the brine that may pumped back into the ocean.

The potential conflict over land and water must be addressed through meaningful public consultation with local communities and Indigenous people, in Environmental Impact Assessments and other processes, as well as community benefit arrangements, to ensure that social, cultural and environmental safeguards are respected, and communities’ and local livelihoods benefit from job guarantees, reduced electricity prices, and critical infrastructure projects.

Moving forward: Regulations for Green Hydrogen

To address the above concerns, regulations should be put in place before moving forward with GH2 commercialization, including:

Hydrogen certification: Clarifying the definition of renewable/ green hydrogen to facilitate certification/Guarantee of Origin.
Guarantee of origin (GO) schemes being set up and implemented.
Setting local job creation and poverty alleviation targets alongside the hydrogen value chain.

The Future of Green Hydrogen

Green hydrogen in South Africa has potential for job creation, for improving economies and the decarbonisation of certain sectors of the economy. However, this needs to be done through meaningful consultation with civil society, communities and Indigenous people (which must be continuous and throughout all stages of the project, including implementation) with strong guarantee of origin regulations to help ensure that South Africa’s GH2 programme doesn’t end up creating a new market for gas-based blue hydrogen in the near term, undermining the nation’s climate goals.

Resources:

A press statement from H2 Watch can be found here. Links to recordings of summit sessions on community participation and how industry should engage with communities, can be found here.
The programme and recordings of the different sessions of the Summit can be found at SAGHS 2023 | Green Hydrogen Summit.
RMI report “Fuelling the Transition: Accelerating Cost-Competitive Green Hydrogen” and the Carbon Tracker report “Clean Hydrogen’s Place in the Energy Transition”.

The 2023 Green Hydrogen Summit in South Africa

NORTH AFRICA’S HYDROGEN MIRAGE

RABAH AREZKI

SEPTEMBER 2023

The prospect of billions of dollars pouring into hydrogen projects threatens to distract leaders from domestic crises

Today the rich deep blue of the Mediterranean Sea serves as the incongruous backdrop for thousands of tragic journeys by refugees and migrants heading north toward Europe. On June 14, 2023, a refugee boat capsized off the coast of Greece and left hundreds dead. In 2022, no fewer than 160,000 people attempted to cross miles of open water, often in overcrowded or makeshift boats, according to the UNHCR, the United Nations refugee agency. Almost 40 percent of them were from Tunisia or Egypt. More than 2,300 died.

The migrants were desperately seeking safety and economic opportunity, and thousands more continue to risk their lives every day for the same reason. The flow of migrants has raised tensions between the Northern Rim and the Southern Rim of the Mediterranean, a body of water that has served as the crossroads between Eastern and Western civilizations for millennia.

Even as tensions over migration run high, the Northern Rim and the Southern Rim have renewed their cooperation over energy issues. In addition to traditional oil and gas exporters such as Algeria and Libya, other nations, including Egypt, Lebanon, Israel, and Mauritania, are poised to get in on the action, thanks to several major fossil fuel discoveries.

Amid the global energy transition, investors are anxious to pour billions of dollars into many of these countries to turn the new fossil fuel finds into hydrogen. The element is the key feedstock for fuel cells, which use chemical reactions to generate electricity cleanly, with water as the main byproduct. Notwithstanding the considerable technological challenges ahead, demand for the gas in Europe and elsewhere is widely expected to surge as vehicles, factories, and other energy users seek to reduce greenhouse gas emissions.

For Southern Rim nations, however, this tantalizing opportunity for economic development risks turning into just another Sahara mirage. That’s because the hype surrounding hydrogen may continue to distract the regions’ leaders from addressing the tough domestic social issues that are behind the migration crisis. If the technology does become viable, revenue from hydrogen exports to Europe could just perpetuate rent-seeking behavior by political and economic elites at the expense of their own citizens.

Certainly, the fallout from Russia’s invasion of Ukraine helped cement energy cooperation between the two sides of the Mediterranean. The war put energy security at the top of the policy agenda as European nations scrambled to replace Russia’s natural gas and oil. More resources from the Southern Rim flowed north, generating foreign exchange revenue.

Political leaders from Italy, France, and Germany visited their counterparts in Algeria, Egypt, Libya, and Mauritania to expand cooperation on energy issues. These high-profile contacts resulted in promises of more fossil fuel exports and new investments in extraction and transportation, including pipelines.

New focus on renewables

Critics have blasted Europe’s advanced economies for their not-in-my-backyard policies of relying on developing economies to do the dirty work of producing fossil fuels and extracting minerals critical for the energy transition. In addition to the climate and environmental risks, the Southern Rim and the rest of Africa face the danger of being left behind once Europe resolves its energy security issues. The economic concentration around fossil fuels and associated capital investments expose these nations to the risk of stranded assets or the threat of stringent restrictions on fossil fuel trade.

The European Union has made great strides in advancing its energy transition. Investments in renewable energy have increased rapidly, but the race to replace energy from Russia also showed how hard it is to quickly ramp up renewable and other cleaner energy sources. Still, the formidable decline in the cost of producing renewable energy has been a key driver behind these investments.

As for the Southern Rim, nations there will face greater macroeconomic and financial challenges in the energy transition, partly because of the relatively higher cost of capital. Some Southern Rim nations have made progress toward reducing greenhouse gas emissions. Egypt and Morocco are ramping up renewable energy. Morocco built the Noor-Ouarzazate complex, the world’s largest concentrated solar power plant, covering 3,000 hectares. Others, like Algeria and Mauritania, are gearing up to install large solar and wind projects.

These days hydrogen is at the center of attention in the Mediterranean region. Hydrogen is easily the most abundant element in the universe, offers a clean source of energy, and can come from a variety of sources. “Gray hydrogen” is produced from natural gas but without carbon capture and storage. When carbon capture and storage are added, the hydrogen is labeled “blue,” but the costs are higher. “Green hydrogen” is produced using nuclear power, biomass, or renewable energy like solar or wind. Its costs are still relatively high.

Enthusiasm around green hydrogen is raging. Projects costing billions of dollars are under consideration in Mauritania, Algeria, Egypt, and other countries. A German developer and Mauritania signed a memorandum of understanding with a consortium for a $34 billion project with annual capacity of 8 million tons of green hydrogen and related products.

Hydrogen projects could help keep energy flowing from the Southern Rim to the Northern Rim. The infrastructure to transport hydrogen is already under development, although projects so far focus on the intra-European market. A large chunk of the prospective hydrogen investments may end up in Europe, with Italy and Spain gearing up to become big producers. Portugal, Spain, France, and Germany signed an agreement to build a Mediterranean pipeline that would supply 10 percent of the EU’s hydrogen by 2030. The energy ministries of Italy, Germany, and Austria signed a letter of support for the development of a hydrogen-ready pipeline between North Africa and Europe involving Italy’s gas grid operator.

Such mega investments could have important macroeconomic implications, especially for the smaller and less diversified economies of the Southern Rim. Challenges will involve exchange rate appreciation and current account swings from deficit to surplus. Policymakers will also have to tread carefully because of contingent liabilities associated with large projects, such as failure or abandonment.

While the shift in geopolitics accelerated by Russia’s war in Ukraine is furthering energy integration across the Mediterranean, the new push for industrial policy and economic sovereignty in Europe is working to limit integration. These are new risks North African countries will have to manage, and they suggest the need for greater attention to addressing domestic issues.

Domestic issues

Big hydrogen projects hold out the promise of generating revenues that could help address the needs of Southern Rim citizens. Access to reliable and abundant energy is surely a building block for industrializing economies. Yet, if history is any guide, the abundance of energy alone is not sufficient to achieve economic development. Countries in the Southern Rim have a lot on their plates, and social cohesion is at stake. The authorities need to regain the confidence of their youth and address long-standing domestic issues, whether social, economic, or regional. The desperation of young people from the Southern Rim drives them to risk their lives crossing the Mediterranean, signaling the pervasiveness of these issues.

There are, of course, great differences between oil-exporting and oil-importing Southern Rim nations. Importing nations such as Morocco and Egypt have overhauled or removed fuel subsidies or price controls, with accompanying mitigation measures such as cash or in-kind transfers to ease the impact on poor households. Oil-exporting countries such as Algeria and Libya have tended to stick with subsidies despite their high economic and environmental costs. In economies with little political accountability, this reflects an enduring social contract under which citizens accept subsidies and look the other way as political and economic elites capture the revenues generated by fossil fuels and now, most likely, hydrogen.

Across the Southern Rim, distrust of government and perceptions of corruption remain high. The lack of economic opportunities stems from the lack of a dynamic private sector. Unemployment is higher for individuals with more education than for those with less. In many of these countries, the legacy of a state-administered economy with large, government-owned enterprises crowds out independent businesses and creates the conditions for a parallel informal economy.

And state-owned banks have long underpinned shadowy flows of funds that support the state-owned enterprises and limit fair competition. In countries where the footprint of the state is less significant, it is a crony private sector that typically captures the wealth, distorting competition. Whether in systems where state-owned enterprises or a crony private sector dominates, millions of young people have been left behind. In both cases, the perception of corruption and rampant inequality are gravely undermining social cohesion.

The prospect of hydrogen exports may help improve external fund balances. But it may also reinforce rent-seeking activities to the detriment of other aspects of a nation’s economy. To avoid repeating past mistakes, the sector must show utmost transparency to limit corruption.

Authorities should also try to maximize not only the revenues they derive from hydrogen production but also the benefits for citizens, including localization policies. An energy sector that is geared for exports will not yield the kinds of jobs that will be needed for young people, who represent the majority of the population in the Southern Rim.

It is thus important to carry out reforms that go beyond the energy sector. Restructuring must be broader and aimed at removing roadblocks to creating decent jobs for young people. That would help address their growing sense of desperation. But carrying out such changes in the context of widespread distrust isn’t easy.

The sequencing of reform could build trust. In a nutshell, changes must start with the political and administrative elites and cronies “walking the talk” before introducing changes that affect the broader population. Specifically, it will help to get rid of corporate subsidies stemming from import monopolies and more generally to promote fair competition by limiting the abuse of dominant positions by state-owned enterprises or cronyism. In addition to greater transparency in the energy sector, the use of distributed solar power would blur the distinction between consumers and producers. That may make citizens more accepting of evolving market prices. Only then could labor market restructuring and exchange rate stabilization bear fruit.

Among nations on the Southern Rim, regional cooperation is at an all-time low. Rekindling cooperation would help create a larger market that would be more attractive for new investment, similarly to the development of the EU. A coming-together of North African nations could help in the renegotiation of better trade deals with EU partners and others.

Rather than grasping at the mirage of collecting prospective rents from hydrogen exports, leaders in the Southern Rim should pay more attention to building trust at home and providing opportunities to the young people who are voting with their feet at the peril of their own lives.

References:

Arab Barometer. 2023. Arab Barometer Wave VII. https://www.arabbarometer.org/surveys/arab-barometer-wave-vii.
Arezki, Rabah, and Adnan Mazarei. 2023. “MENA and the Global Energy Conundrum.” Center for Global Development Policy Paper, Washington, DC.
Arezki, Rabah, Ana Margarida Fernandes, Federico Merchán, Ha Nguyen, and Tristan Reed. 2023. “Natural Resource Dependence and Monopolized Imports.” World Bank Policy Research Working Paper 10339, Washington, DC.
International Energy Agency (IEA). 2022. “Global Hydrogen Review.” Technology Report, Paris. https://www.iea.org/reports/global-hydrogen-review-2022.

https://www.imf.org/en/Publications/fandd/issues/2023/09/north-africa-hydrogen-mirage-rabah-arezki

Shades of green hydrogen: EU demand set to transform Namibia

Published on 15/11/2023, 12:00pm

Backed by the EU, Namibia has a $20 billion plan to export green hydrogen. A secretive tender process raises concerns for nature and citizens.

For Namibia, green hydrogen could be transformative.

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WASCAL AND ECREEE COMMENCE GREEN HYDROGEN POLICY STRATEGY AND ACTION PLAN FOR WEST AFRICA

The ECOWAS Centre for Renewable Energy and Energy Efficiency (ECREEE), in collaboration with WASCAL, has organised a two-day regional workshop to kick start the development of the strategy and action plans 2023-2030 and 2031-2050 of the ECOWAS Green Hydrogen Policy.

The workshop brought together stakeholders from governments, the private sector, and international organizations, with the objective to validate the methodology for developing the strategy and related action plans.

WASCAL AND ECREEE COMMENCE GREEN HYDROGEN POLICY STRATEGY AND ACTION PLAN FOR WEST AFRICA

South Africa: A potential green hydrogen powerhouse

BY KIERAN WHYTE JUNE 23, 2023

In brief

Hydrogen markets in Africa are expected to grow exponentially but there are still multiple barriers to the widespread development of decarbonised hydrogen. Each energy sector investment faces challenges in the form of infrastructure gaps, policy, regulatory, economic and financial barriers. A recent positive development in this regard is the announcement that a dedicated blended finance fund, SA-H2, has been launched to raise USD 1 billion for the construction of green hydrogen projects in South Africa. Once established, the SA-H2 will join the SDG Namibia One Fund to offer a blended finance solution for Southern African’s green hydrogen sector.

https://www.globalcompliancenews.com/2023/06/23/https-insightplus-bakermckenzie-com-bm-energy-mining-infrastructure_1-south-africa-a-potential-green-hydrogen-powerhouse_06212023/

Africa Investment Forum showcases $1.475 billion in green and renewable energy deals at African Development Bank 2023 Annual Meetings

Africa Investment Forum’s current pipeline comprises 90 deals valued at $62.9 billion

23-May-2023

The Africa Investment Forum presented four renewable energy and sustainability projects worth nearly $1.5 billion to investors on the sidelines of the African Development Bank Group’s 2023 Annual Meetings.

The curated projects, which are drawn from all of Africa’s regions, are sourced from the Africa Investment Forum’s pipeline. They reflect gathering urgency in Africa, the world’s most vulnerable region to climate change, to accelerate climate action, including closing financing gaps by securing an ever-increasing share of global capital for the continent.

https://www.afdb.org/en/news-and-events/press-releases/africa-investment-forum-showcases-1475-billion-green-and-renewable-energy-deals-african-development-bank-2023-annual-meetings-61353

AFRICA GREEN HYDROGEN ALLIANCE

INTRODUCTION

All major energy transition pathways identify green hydrogen as the most credible solution available today for decarbonizing heavy industry and transport sectors.

Few highlight the significant technical and market potential of green hydrogen and derivatives’ production across the African continent, which enable an historic economic and climate leadership opportunity.

Delivering on that potential will require unprecedented international collaboration to address major barriers.

The Africa Green Hydrogen Alliance was soft launched at COP26, connecting existing initiatives and leadership efforts, with the potential to generate new industry awareness, opportunities and action.

CONTEXT

Global confidence has grown rapidly on the role of green hydrogen in securing a clean energy revolution that achieves both the UN Sustainable Development Goals and the objective of the Paris Agreement.

The United Nations’ Marrakech Partnership’s Energy Pathway foresees 500-800 gigawatts (GW) of green hydrogen electrolysis deployment by 2030, consistent with the International Energy Agency’s (IEA) recent Net Zero 2050 scenario. Production at this scale can decarbonize key sectors like steel, shipping, power, and chemicals (i.e. fertilizers) that are challenging to electrify with renewables directly. Critically, many experts have long expected green hydrogen costs to decline rapidly, potentially becoming cost-competitive with emissions-abated fossil fuels this decade. The most rapid path to this outcome will leverage the most advantageous locations worldwide, where exceptional renewables create new value pools for global carbon abatement.

Today, industry assessments of scalability and cost reduction increasingly support this bold trajectory. The Green Hydrogen Catapult was launched in 2020 by seven leading energy and industry companies with a target to deliver 25 GW globally and costs below USD 2/kg by 2026—a possible tipping point for global industrial development. The Hydrogen Council estimates that a US$200 billion investable pipeline of green hydrogen projects are currently under development. BNEF currently estimates that annual demand for ~8GW of green hydrogen electrolysis capacity and its supply will arise by 2025.

This private sector momentum is underpinned by emerging policy leadership in Europe, China, India, and North America. Funding support ranging between USD 10-20 billion per year, alongside carbon pricing and regulation, will spur more rapid deep decarbonization than commonly anticipated as costs continue to decline and demand expands further.

THE OPPORTUNITY FOR AFRICA

Green hydrogen unlocks the world’s first zero carbon industrial opportunity by enabling renewable energy sources to be converted into transportable and useful chemicals and value-added products. Many countries across Africa are well-suited to access this with large tranches of non-arable land and strong renewable energy potential. New opportunities for near-zero carbon industry and employment are within reach—if not yet in hand.

Export markets offer breakthrough opportunities for developing this new sector, today. Effective public and private sector collaboration will be necessary to rapidly mobilize investment and project development to produce green hydrogen in quantities needed to meet 2030 decarbonization targets. Meanwhile, mass-scale production can open up renewable energy and green hydrogen supply chains at significant scale to further broader economic growth and electrification. For example, installation of four global scale green hydrogen projects would more than double the renewable energy capacity installed across Africa as of 2020.

At the same time, could this export-oriented development unlock structural changes in local, carbon-intensive heavy industries to address challenging environmental and health effects?

Deliberate efforts to adopt green hydrogen in hard-to-electrify end-uses would benefit from large-scale supply chains and expertise established for export markets. Additional and significant financial support for broader adoption would be necessary, and may be reasonable: On the narrow economics, green hydrogen may approach cost competitiveness with natural gas by the early 2030s in India and Brazil, according to BNEF, as well as many countries in Africa. This is a natural extension of renewable energy cost declines, which have made it the most cost-competitive source of electricity in many emerging economies, where it saved USD 32 billion across 534 GW in 2020, according to the International Renewable Energy Agency.

However, accessing these opportunities from today even as the green hydrogen supply chain matures will require significant financial support from developed countries or targeted domestic fiscal policies. Examples of this include Germany’s support for sector development on the continent, and India’s forthcoming mandate for green hydrogen adoption in refining and fertilizer production.

DELIVERING AFRICA’S GREEN HYDROGEN POTENTIAL

Grasping the opportunities posed by a new African green hydrogen industry will require a concerted effort from a diverse set of stakeholders. These include government ministries, project developers and financiers, international organisations and financial institutions, think tanks and technical experts and academic institutions.

Visionary private sector partners and other international collaborators can offer expertise, capacity and access to capital. At the same time, they can work with host governments and local and regional institutions to strengthen permitting processes and project structures that deliver on national and regional priorities for sustainable development and economic growth. Transparency and shared efforts to deliver each stakeholders’ needs will be essential to build broader trust and capabilities required for rapid, large-scale industry development.

MEMBERS

A broad base of mission-aligned public and private sector partners interested in pre-competitive collaboration can send a strong signal to policymakers in developed countries of broad intention to work towards equitable, lasting industrial development outcomes with adoption of green hydrogen.

Please find below a list of members of the Alliance:

Egypt, Ministry of Electricity and Renewable Energy (MOERE)
Kenya, Ministry of Energy
Mauritania, Ministry of Petroleum, Energy & Mines
Morocco, IRESEN
Namibia, Green Hydrogen Commission
South Africa, Industrial Development Corporation

OBSERVERS

Africa Development Bank (AfDB)
The United Nations Economic Commission for Africa (UNECA)
African Union Development Agency-NEPAD (AUDA-NEPAD)

SECRETARIAT

UN Climate Change High Level Champions
United Nations Economic Commission for Africa
Green Hydrogen Organization

CASE STUDIES

AGHA members in the Green Hydrogen Country Portal
Egypt
Egypt aims to be one of the largest exporters of clean hydrogen in the region, this has become a major goal in light of global changes related to the energy sector, as well as global economic and environmental changes in relation to climate change and the green economy. The Egyptian Government is achieving large-scale, low-cost Renewable Energy development and designing models for sustainably maximizing fiscal revenue and development in Renewable Energy investments in green hydrogen and ammonia production. Egypt’s world-class solar and wind resources give it a long-term competitive advantage in producing green hydrogen and green ammonia.

Kenya

Kenya produces more than 90% of its electricity from hydropower, geothermal energy, solar and wind energy as well as biomass. In this context as a leading African country in renewable energy with an abundance of the elements required to develop green hydrogen, it is well placed to acquire green hydrogen as an alternative energy source. This could enable Kenya to replace fossil fuels completely and thus create a new economic sector which keeps larger portions of the value creation chain in the country, leading to the generation of domestic jobs and economic growth.

Mauritania

Mauritania has excellent renewable energy prospects making it a potential leading green hydrogen producer in Africa. Significant green hydrogen project developments and Mauritania’s proximity to the European market has the potential to increase export benefits, in addition to providing power to the national grid and various industrial activities, such as green steel production.

Morocco

The Kingdom of Morocco aims to create an economic and industrial sector around green molecules, particularly hydrogen, ammonia, and methanol, to consolidate its energy transition by contributing to reducing greenhouse gas emissions and supporting decarbonisation in partner countries.

Namibia

Namibia is aiming to become a green hydrogen superpower in the coming decade by positioning itself as a leader in the emerging markets and an international exporter of green hydrogen. Green hydrogen will be an important source of foreign investment and be important for the country’s energy security and transition. The government plans to use it extensively to decarbonize its own economy.

South Africa

South Africa identifies green hydrogen as an essential component of its energy transition plan and towards the global commitment to decarbonize its economy (Hydrogen Society Roadmap, 2021).

South Africa has the competitive advantage to produce and export green hydrogen energy and aims to work on the existing opportunities to directly replace the hydrogen produced from natural gas by green hydrogen. The implementation of the hydrogen roadmap is in lines to tackle electricity supply issues and support inclusive growth and assist government to reduce unemployment, poverty, and inequality.

EVENTS

The Africa Green Hydrogen Alliance (AGHA) from 26-27 September is holding its inaugural forum bringing together representatives from African governments, the private sector, civil society and development partners.

The forum is a platform for sharing good practice and effective policies that will support the growth of sustainable green hydrogen markets and agree clear targets for green hydrogen ahead of COP27. The forum is co-sponsored by the African Development Bank (AfDB) and its internal entities (the Africa Legal Support Facility and the Sustainable Energy Fund for Africa) and the Green Hydrogen Organisation (GH2) with support from the UN High-Level Climate Champions and GIZ.

Africa Green Hydrogen Alliance

Algeria-UK Strategic Dialogue November 2023: joint statement

On the 16 November 2023, the second session of the Strategic Dialogue between the United Kingdom and Algeria was held in London.

The Minister of State for the Middle East and North Africa, Lord Ahmad of Wimbledon, and the Minister of Foreign Affairs and National Community Abroad of the People’s Democratic Republic of Algeria, His Excellency Ahmed Attaf, met in London on 16 November 2023, in the framework of the second session of the Algeria-United Kingdom Strategic Dialogue.

The Ministers held constructive talks aimed at deepening existing bilateral cooperation. They praised the longstanding relationship between Algeria and the United Kingdom, which dates back to the sixteenth century and the appointment of the first British Consul in Algiers in 1580 and the signing in 1682 of a bilateral Treaty of Peace and Trade.

The two sides noted with satisfaction the progress in implementing the recommendations of the first session of the strategic dialogue held in 2020. They emphasised the warm and extensive links between the UK and Algeria, praising the depth of diplomatic, defence, security, economic, trade, scientific research, education and cultural cooperation. The UK and Algeria agreed to strengthen the bilateral partnership in those fields, including through regular official-level engagement.

The Ministers also discussed regional and multilateral issues of common interest. The two sides shared their assessments of the situation in the North Africa and Middle East, as well as the Sahel region.

The UK congratulated Algeria on its election earlier this year to both the UN Security Council and the UN Human Rights Council. The UK looked forward to supporting Algerian priorities during its upcoming tenure at the Security Council and beyond on issues of concern, including shared aims of stability, security and human rights, stability in the Sahel and non-constitutional change of government there. The UK and Algeria expressed concern about non-constitutional changes of government, including in the Sahel, and the importance of addressing the root cause of instability. The deteriorating security situation in Mali, and the need for a resolution to the Niger crisis, were particular areas of concern.

The Ministers reaffirmed their shared commitment to regular political dialogue and high-level exchanges to deepen understanding and strengthen cooperation on regional and global issues of mutual concern. They also undertook to promote peace, security and stability in their respective regions as well as globally, through close coordination and collaboration within international organisations and fora.

With regards to the current situation in the Middle East, the two sides expressed their deep concern at the loss of civilian lives and the deteriorating humanitarian situation. The two parties called for the protection of civilians and the facilitation of access for humanitarian aid. Both sides reiterated their support for a two-state solution based on 1967 borders as the only viable solution to the Middle East conflict.

On the issue of Western Sahara, the two sides reaffirmed their commitment for a just, lasting and mutually acceptable political solution, based on compromise, which provides for the self-determination of the people of Western Sahara, consistent with the principles and purposes of the Charter of the United Nations. The two sides reaffirmed their full support to the efforts of the UN Secretary-General’s Personal Envoy, Mr Staffan de Mistura as well as MINURSO. The two countries expressed their concern at the humanitarian situation in the Tindouf refugee camps and reiterated the need for further humanitarian support.

The UK and Algeria then discussed existing and planned bilateral cooperation. The sides reaffirmed their desire to further strengthen and enhance partnership and cooperation in all fields and explore new avenues of cooperation based on mutual interest. They recognised the potential for further economic cooperation in areas such as trade, investment, energy and technology. Both countries committed to facilitate and promote trade and investment, identify opportunities for business partnerships, and create an enabling environment for increased economic engagement.

On defence and security, the two sides:

welcomed ongoing cooperation in the face of shared security challenges, including the fight against terrorism, organised crime, human trafficking, cyber security and other transnational threats.
agreed to strengthen intelligence sharing, law enforcement cooperation, and capacity building efforts to enhance security and promote stability in the region.
looked forward to further deepening the close defence relationship and to the Joint Military Dialogue in 2024.
reaffirmed the strong cooperation on aviation and maritime security issues – a key enabler for trade and people movement between our two countries. To that end, the two sides agreed to advance a technical Memorandum of Understanding on maritime security cooperation.

On trade and investment, the two sides:

celebrated UK investments in Algeria, and the mutual benefits arising from them.
renewed the shared commitment to build successful and mutually beneficial trade and investment partnerships. In this regard, the UK and Algeria identified several opportunities to develop through investment and partnership, including in the fields of renewable energy, finance and banking, the digital and technology sectors, pharmaceuticals, Small and Medium-sized Enterprises, agriculture, and tourism.
acknowledged the importance of energy cooperation, including renewable energy, energy efficiency, and the transition to a low-carbon economy. To that end, the UK and Algeria committed to explore opportunities for collaboration in the energy sector, including knowledge sharing, technology transfer and joint research and development initiatives.
acknowledged the importance of supporting and promoting start-ups as drivers of innovation, economic growth and job creation. The UK and Algeria committed to examining future opportunities for exchanging best practice which might be achieved through the signing of bilateral of Memoranda of Understanding. The UK also acknowledged the significant initiatives undertaken by the Algerian Government to foster the start-up ecosystem since 2020.
agreed to explore bilateral exchanges of visits on start-ups and enterprise, aimed at cultivating cross-cultural exchange and collaboration.
agreed to advocate for the establishment of collaborative frameworks between venture capitalists from both countries, fostering the exchange of best practice and facilitating fundraising for Algerian start-ups.
welcomed the creation of the Trade Task Force, following on from the trade facilitation workshop earlier this year. To that end, the UK and Algeria signed a Memorandum of Understanding, to act as a foundation to further the discussion on a mutually beneficial trade agreement.
welcomed the launch of the Developing Countries Trading Scheme which supports economic growth and diversification in countries across Africa, and which offers Algeria tariff free access to the UK in the majority of sectors.
agreed to increase the level of contact and exchanges between business communities.

On consular affairs, migration and justice, the two sides:

noted with satisfaction the level of bilateral dialogue on consular affairs and the recent visit to Algeria by UK Home Office Minister Jenrick earlier this year.
agreed to further develop contacts between officials in the fields of consular affairs and to strengthen cooperation on returns.
agreed to continue strengthening existing cooperation on wider judicial and home affairs cooperation, including tackling irregular migration and human trafficking, consolidating institutional cooperation including by benefitting Algeria from the UK expertise on anti-corruption and good governance.

On education and culture, the UK welcomed Algerian government’s initiative to increase the teaching of English language in schools and as a language of tuition in higher education establishments. The UK reiterated its willingness to lend its support in this regard through increasing inter-universities cooperation. Elsewhere, the two sides:

welcomed the launch of the joint Higher Education Committee as a vehicle to strengthen collaboration and build university-to-university partnerships through twinning agreements, joint projects and research programs in the field of agriculture, renewable energy, artificial intelligence, nanotechnology and green hydrogen.
looked to facilitate academic cooperation, student exchanges, cultural events and further collaboration between educational and cultural institutions.
welcomed the close collaboration between the British Council and the Ministry of National Education to deliver training to English language teachers.
welcomed the recent signing of an updated Memorandum of Understanding on the establishment of “British Schools” in Algeria, and now look forward to the opening of a second school – “British Campus Algeria” – in 2024.

The UK also congratulated the Algerian side on the decision to set up a Cultural centre in London to promote and expand cultural ties between the two countries.

On parliamentary cooperation, the two sides welcomed the dynamics of political dialogue and committed to encouraging parliamentary cooperation through exchange of visits of members of parliament particularly through reinvigorating the Algerian-UK Friendship Parliamentary Group.

On the exchange of high level visits between the two countries, the UK looked forward to Algeria’s participation at the Africa-UK Investment Summit which will be hosted by the UK Prime Minister in London on April 2024.

The two sides agreed to convene for follow up talks at Ministerial level in Algiers in one year’s time.

https://www.gov.uk/government/news/algeria-uk-strategic-dialogue-november-2023-joint-statement

Egypt finalises strategy to launch hydrogen production

The final touches are being put to laws designed to facilitate massive investment in hydrogen production in Egypt. Local and international firms hoping to get a slice of the pie may however hold off until the next devaluation of the Egyptian pound, which is expected in early 2024. […]

Published on 09.10.2023

South Africa Gives Green Light To Green Hydrogen Commercialisation Strategy

By Pooja Chandak – 20th October 2023

Cabinet has given the green light for the implementation of the Green Hydrogen Commercialisation Strategy (GHCS), as announced on Thursday. Minister in the Presidency Khumbudzo Ntshavheni emphasized that this move aims to position South Africa as a major producer and exporter of green hydrogen.

The government has identified potential funding sources for green hydrogen projects, building on the extensive feedback received on the draft Green Paper from stakeholders. The GHCS is aligned with the Hydrogen South Africa Strategy, approved by the Cabinet in 2007, to prepare the nation for a hydrogen-based economy. This strategy falls within the framework of the Hydrogen Society Roadmap, developed by the Department of Science and Innovation and approved by the Cabinet in 2021.

Additionally, the Executive Authority welcomed the recent second South Africa Green Hydrogen Summit held in Cape Town, where Heads of Agreements were concluded to establish an SA-H2 Fund aimed at fostering the growth of the country’s green hydrogen sector with the goal of attracting $1 billion in funding. The Minister estimated that the hydrogen economy could contribute 3.6% to South Africa’s GDP by 2050 and create around 370,000 jobs.

Regarding electricity generation, Cabinet received an update on Eskom’s Generation Systems Performance, indicating that Eskom’s power generation capacity is currently averaging 28,615 MW, up from 27,410 MW in May 2023. Unplanned outages due to plant breakdown have also decreased, averaging 13,743 MW compared to 17,369 MW in May 2023.

Effective plant maintenance is credited for this reduction. Furthermore, Cabinet welcomed the return of Kusile Unit 1 ahead of schedule, adding an extra 800 MW to the grid, which is expected to help reduce the frequency of load shedding.

https://solarquarter.com/2023/10/20/south-africa-gives-green-light-to-green-hydrogen-commercialisation-strategy/

Africa Shows Real Promise in Green Hydrogen with Projects in Egypt, Mauritania, Namibia and South Africa

September 21, 2023

There’s a new powerhouse in African renewables. And it has plenty of experts talking about it.

By NJ Ayuk, Executive Chairman, African Energy Chamber

There’s a new powerhouse in African renewables. And it has plenty of experts talking about it.

The report “The State of African Energy 2Q 2023 Outlook,” recently released by The African Energy Chamber (AEC), discusses the current and future projections for renewables on the continent. The most exciting finding is the competitive growth within the hydrogen electrolyzer space.

Africa’s current announced capacity of hydrogen, of about 125 gigawatts (GW), has overtaken solar capacity on the continent and is now second only to wind when it comes to renewables. Contributing almost all the capacity are Egypt, Mauritania, South Africa, Morocco, Namibia, and Djibouti — the same group of nations that recently formed the Africa Green Hydrogen Alliance (AGHA).

AGHA is an ambitious group, aiming to produce 30 to 60 million tons of clean hydrogen a year to add up to USD126 billion to the gross domestic product (GDP) of its members by 2050 and create up to 4 million new jobs.

If AGHA can hit these goals — or even come close to their projections — these prospects will go a long way in securing reliable access to power for millions of Africans currently suffering from energy poverty. Plus, the group will likely pave the way for hydrogen’s foray into other regions of the continent. We at the chamber are watching this development closely.

Why Hydrogen?

Hydrogen can be used as a feedstock for everything from steel and ammonia production to energy generation and storage to some types of fuel. Traditional hydrogen production processes generate high volumes of carbon emissions. But when produced with electrolysis powered by renewable energy — as AGHA is undertaking — hydrogen is an environmentally positive fuel with very low emissions across its life cycle.

Fortunately, Africa boasts a bounty of renewable energy inputs, like solar and wind, that can be harnessed to turn hydrogen into a viable sustainable power supply — as well as a powerful decarbonization tool.

According to a Deloitte analysis, hydrogen producers in Africa are well-situated to be able to produce clean hydrogen far more affordably than their European counterparts – by as much as three-fourths – thanks to the wide availability of renewable energy and lower production costs.

And our report indicates that, as hydrogen capacity picks up over the 2030s, our continent’s average cumulative solar and wind capacity will reach 75% of their total capacity. This means that African solar, wind, and hydrogen efforts will all help each other and grow in tandem into important energy sources.

It’s true that African economies are less developed than Western nations. In some ways, it seems that in this case, Africa may benefit from its comparative lack of industrialization by learning from others’ mistakes and circumventing some ineffective or short-lasting technologies.

Projects Already Underway

Industry experts are noticing a rapid uptick in green hydrogen development on the continent. The vast labor pool required on the front end during the construction phase is creating jobs along the value chain and offering specialized training opportunities for continued benefit to local communities.

Already in 2023, we’ve seen several important hydrogen projects really take off in Africa.

Mauritania’s AMAN project is the continent’s biggest green hydrogen development to date, with an expected output of 1.7 million tons per annum (tpa). Namibia also boasts major developments in its green hydrogen economy, including the 3 GW Tsau Khaeb project with a production capacity of 300,000 tpa and the development of three hydrogen valleys in Kharas, Kunene, and Walvis Bay.

South Africa has initiated several key green hydrogen projects, like its 780,000 tpa green ammonia plant and the HySHiFT renewable hydrogen project, partially funded by a €15 million subsidy from Germany. Egypt, meanwhile, has plans for a 4 GW electrolyzer plant at the Suez Canal Economic Zone (SCZONE), among others.

Morocco has been collaborating with international companies to launch its own green hydrogen initiatives, including the 900,000-tpa AMUN project. And Djibouti has announced plans for the construction of a 10 GW green hydrogen hub, as well as a partnership with IPP Fortescue Future to study the feasibility of green hydrogen at two sites in the country.

An Exciting – and Profitable – Investment

All of this construction requires serious capital. And equally exciting is that the potential for investment in green hydrogen is creating a buzz.

Consider this statement from 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.”

In fact, Deloitte anticipates that export revenues from African hydrogen will reach USD110 billion by 2050. By that year, the consulting firm predicts that North Africa — with an export potential of some 44 million tons — will be one of four regions worldwide that will account for almost half of global hydrogen production and 90% of trade.

Which makes this the ideal time for interested investors to get in on the ground floor.

United Nations’ Office of the Special Adviser on Africa (OSAA) cluster lead for Energy and Climate Bitsat Yohannes really hit the nail on the head in a recent article: “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%… 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.”

Africa Shows Real Promise in Green Hydrogen with Projects in Egypt, Mauritania, Namibia and South Africa

Can Singapore unlock Africa’s green hydrogen potential?

10 OCTOBER 2023

Green Hydrogen, Energy Transition

Author

Professor Michaël Tanchum,

Africa has an estimated[1] potential to produce US$1.06 trillion worth of green hydrogen by 2035. Viewed as a premier energy carrier that will facilitate the global transition to renewable energy sources, European and Asian firms are turning their attention to developing Africa’s enormous green hydrogen potential. While the North African nations of Morocco and Egypt have emerged as green hydrogen leaders, the Sahelian nation of Mauritania is a key to unlocking hydrogen potential of sub-Saharan Africa (SSA). With several international consortia competing to develop Mauritania’s green hydrogen production infrastructure, the consortium led by British energy firm Chariot has developed a unique edge through its acquisition of Singaporean water desalination technology.

The Global Rush for Green Hydrogen and Green Ammonia

An energy carrier produced from renewable energy sources, green hydrogen can be used directly as a fuel, an input for manufacturing processes (such as ‘green steel’ production) or as an energy storage and transportation system. While all three uses are critical for climate-friendly commerce and industry, it is particularly the function as a storage system for renewable power that makes green hydrogen vital to energy transition. The electricity produced by solar and wind power is intermittent and variable, depending on hours of daylight or wind availability. Green hydrogen stands as an alternative technology to utility scale batteries – which require toxic and difficult to obtain minerals – for storing energy produced from renewable sources and then deploying on demand.

Different from natural gas-derived hydrogen produced in a process that releases considerable volumes of CO2 into the atmosphere (and therefore called “gray” hydrogen), green hydrogen is produced by using electricity generated from renewable sources to split water into its hydrogen and oxygen components, creating a versatile, carbon-free (hence, “green”) energy carrier. Reversing the electrolysis process in a fuel cell by recombining green hydrogen and oxygen back into water generates electric current, providing on-demand, climate-smart power. The further advantage of green hydrogen is that the most cost-effective way to store and transport green hydrogen is in the form of its derivative green ammonia. Since ammonia is one of the basic inputs for fertilizer manufacturing – currently accounting for about 70%[2] of global ammonia consumption – there is already offtake demand for green ammonia, which can easily use existing ammonia storage and transportation infrastructure.

The pressing need for green ammonia to make agriculture sustainable and resilient against natural gas price shocks is also driving the rush to develop green hydrogen. While the European nations of the Netherlands, Germany, France, Spain, and Italy are consistently among the world’s top ten food exporters[3], the poor quality of their soils make them heavily reliant on synthetic fertilizers[4] to maintain their high levels of agricultural production. On the whole, 50% of European agriculture[5] is dependent on synthetic fertilizers. With natural gas accounting for at least 80% of the variable cost[6] of fertilizer through the use of conventional gray ammonia as a primary input, the commercial viability of European agriculture is tied to affordable supplies of natural gas.

The 400% spike in European natural gas prices in 2021 due to Covid-19 induced supply shocks saw the cost of producing ammonia rise almost ten-fold to US$1,000 per ton leading to a commensurate price rise in synthetic fertilisers. The skyrocketing of gas prices due to the Russia-Ukraine war forced European fertiliser giant Yara to shutter two-thirds of its ammonia production[7], including its plants in France and Italy. A number of European plants making ammonia and more complex fertilisers were forced to shut down last year (2022) due to high natural gas, from Spain’s Fertiberia[8] to Germany’s BASF.[9] The United Kingdom similarly witnessed the closing[10] of its largest fertilizer plant operated by the U.S. firm, CF Industries.

European firms from the leading food exporting countries have been at the forefront driving the development of green hydrogen and green ammonia production in North Africa – particularly in Morocco[11] and Egypt[12], which also have their own significant fertilizer industries. For its part, Morocco’s state-owned fertilizer manufacturing giant OCP (Office Chérifien des Phosphates) – the world’s fourth largest fertilizer exporter – announced[13] in July 2023 that it would construct its own US$7 billion green ammonia plant in the Kingdom. The plant is intended to help the company replace its annual import of US$2bn worth of gray ammonia with domestically produced green ammonia.

Mauritania: A Rising Star in Green Hydrogen

Neighbouring Mauritania is similarly awash with solar energy resources. Three-quarters of the country is covered[14] by the Sahara Desert whose direct normal irradiation (DNI) levels reach or exceed 2,200 kWh/m2.[15] While possessing solar and wind energy resources at the level of North Africa green hydrogen leaders Morocco and Egypt, Mauritania’s population is 7 times smaller than the former and 20 times smaller than the latter. Sparsely inhabited with a population of about 5 million, Mauritania can more easily serve export markets while using the same renewable energy infrastructure to provide for the needs of its own population.

The region surrounding the northern coastal city of Nouadhibou, slated to be a center of green hydrogen production receives a DNI of about 2,074 kWh/m2.[16] The region also possesses rich wind energy resources, with onshore wind speeds[17] of 7 meters per second and even faster speeds offshore. The region already hosts a 30MW[18] wind power generation complex. The country’s capital Nouakchott, on the southern portion of Mauritania’s coast, receives a DNI of about 1,600 kWh/m2.[19] Mauritania’s total wind energy resources are estimated[20] to be 175 GW. Of the five Sahel nations, Mauritania is the only one with a coastline and so can easily provide offtake for export markets. Mauritania’s coast is also an essential factor for green hydrogen production itself, the process requires[21] 9 kilograms of water for every kilogram of hydrogen produced. Like water-depleted Morocco and Egypt, Mauritania’s green hydrogen production will have to rely on freshwater provided by dedicated renewable energy-powered seawater desalination plants.

Despite becoming natural gas player with through the joint development with Senegal of their shared offshore reserves, Mauritania has adopted a national energy transition strategy[22] to increase renewable energy sources to 60% of its energy supply mix by 2030. Mauritania seeks to use its solar and wind energy resources to become a major green hydrogen/green ammonia exporter. As Mauritanian Minister of Petroleum, Energy, and Mines Abdessalem Ould Mohamed Saleh declared, “Our country is determined to play a leading position on the global map of the green hydrogen economy in the coming decades.”

Mauritania has not been lacking for international partners to help Nouakchott attain its green hydrogen objectives. An early entrant to Mauritania’s green hydrogen sector is Australia’s CWP, which has been implementing its 2021 MOU with government of Mauritania to develop a US$40bn[23] green hydrogen/green ammonia complex known as the AMAN project. According to the subsequent May 2022 framework agreement[24], the AMAN project will include an installed capacity of 30 GW with 18 GW from wind power and 12GW from solar. Located in Mauritania’s northern port of Nouadhibou and the neighboring Inchiri region, the AMAN project is expected[25] to produce annually 1.7 million tons of green hydrogen or 10 million tons of green ammonia for local use and export. Massive in scale, AMAN’s slated green ammonia output is equivalent to about five times the current production input requirements[26] of Moroccan fertiliser manufacturing sector.

CWP’s efforts are facing competition in Mauritania’s green hydrogen market from a consortium of companies from Germany, the United Arab Emirates (UAE), and Egypt. Firms from Germany and the UAE have taken leading roles in partnering[27] with Cairo to develop the green hydrogen and green ammonia sectors in Egypt, already among the world’s top ten ammonia exporters. Emirati-owned green ammonia production in Egypt will service the output of Fertiglobe[28], the world’s largest export-focused fertiliser platform jointly owned by the Emirates’ Abu Dhabi National Oil Company and the Netherlands’ fertiliser producer OCI NV. In March 2023, German development and investment firm Conjuncta in cooperation with the Emirati-Egyptian joint venture Infinity Power Holding signed an initial agreement with Mauritania to develop a US$34bn[29] green hydrogen complex. The multiphase project will ultimately have an electrolyzer capacity 10 GW and produce 8 million ton of green hydrogen or its derivative equivalent. Infinity Power, composed of Egypt’s Infinity company and the Emirates’s renewable energy giant MASDAR are already engaged in the development of a 2 GW green hydrogen facility[30] in Egypt. The phase one development of the Mauritania complex, located northeast of the capital Nouakchott, will consist of a 400 MW facility is expected to be operational in 2028.[31]

Against the background of these massive infrastructure projects, the British energy firm Chariot is leading a consortium to develop yet another green hydrogen/green ammonia project. In September 2021, Chariot signed an MOU[32] with the Mauritanian government to advance the development “Project Nour”, a green hydrogen facility of up to 10 GW, using solar and wind resources in the Nouadhibou region. On the occasion of the signing of the agreement, energy minister Saleh reiterated Mauritania’s ambitions to be a central player in the global green hydrogen economy. “We have the potential, and desire,” Minister Saleh declared[33], “to be a world leader in the field of hydrogen production from renewable energy sources.”

Mauritania’s green hydrogen export ambitions took one step closer to realization in April 2022, when Chariot signed an MOU[34] with the Port of Rotterdam in the Netherlands for the import of up to 600,000 tons of green hydrogen per year produced by Project Nour. Chariot regards[35] as the Rotterdam agreement as “a first step in establishing supply chains to enable the sale of green hydrogen and its derivative products (notably ammonia) into Europe.” Following the announcement, the Dutch state-owned natural gas transmission network operator Gasunie, the Netherlands-headquartered bulk handling giant HES International, and the Netherlands’ global leader in tank storage Vopak formed a consortium for the construction of a new green ammonia import terminal[36] in Rotterdam’s Maasvlakte port, which is expected to be operational by 2026.

In the following month, Chariot completed Project Nour’s pre-feasibility study[37] in May 2022 and signed[38] a framework agreement with the Mauritania government for the next development phases.With potential export offtake mechanism in place and the pre-feasibility study completed, Chariot’s position in the race to develop Mauritania’s green hydrogen sector was advanced in September 2022 when Total Eren, now a wholly-owned subsidiary[39] of French energy giant TotalEnergies, entered into a 50-50 partnership[40] for the development of the Nour project, bringing its considerable experience and expertise in the renewable energy sector.

Singapore Water Tech Edge

In 2023, Chariot developed a further edge over its rivals in Mauritania’s green hydrogen sector through the acquisition of a water desalination technology pioneered in Singapore. On 30 January 2023, Chariot announced its purchase of Singapore-headquartered ENEO Water PTE, which focuses on water treatment for arid regions. Green hydrogen production at Chariot’s Project Nour complex will use fresh water[41] from a coastal desalination plant powered by solar and wind energy, raising the challenge for the company to provide sufficient freshwater as a production input while contributing to the politically important task of making sure Mauritania’s renewable energy is also used to provide sufficient freshwater to the its population. ENEO’s technology will help Chariot meet the challenge.The company’s core specialisation[42] involves the solar-powered reverse osmosis desalination systems that are modular and scalable, making ENEO’s systems easily deployable in less accessible parts of Africa. One ENEO system has already been deployed[43] in a brackish water treatment project in Djibouti powered by the 60 MW Ghoubet wind farm. Chariot views[44] ENEO’s Djibouti project as a proof-of-concept for coupling renewable energy and desalination to achieve sustainable water management.

Concerned to balance the water requirements for green hydrogen production with the needs local communities, Chariot intends[45] to originate, invest in, and own decentralised water supply projects, where the water is produced through renewable energy and can be sold to off takers under long-term agreements. Noting that “Water is a precious commodity with cleanliness, scarcity and sustainability of supply becoming growing themes throughout Africa,” Chariot executive Benoit Garrivier observed[46] that the ENEO “technology we use is both modular and scalable we look forward to expanding this offering, in line with our mission of creating value whilst delivering a range of positive impacts.” The executive noted ENEO’s technology was a “strong strategic fit” for Chariot’s green hydrogen production as well as its stated aim to also provide local communities with affordable water access, in line with its commitment to socially responsible development.

Africa-Asia Green Hydrogen Cooperation on the Horizon

The regions of Africa that enjoy extraordinary green hydrogen potential, simultaneously suffer from acute water stress, witnessing increasing periods of drought driven by climate change. Approaches to developing green hydrogen production like that being carried out by Chariot in Mauritania – using climate-smart, Singaporean desalination technology to provide freshwater supplies for both the green hydrogen industry and the local population – will need to be replicated across Africa. In August 2023, Chariot signed an agreement[47] with Morocco’s Mohamed IV Polytechnic University to build a pilot green hydrogen/green ammonia as a proof-of-concept pilot project intended for future large-scale production.

Although European firms have been at the forefront of the effort to develop Africa’s green hydrogen potential, an Africa-Asia green hydrogen future seems to be on the horizon, as the coal-burning regions of Asia move toward ‘co-firing’, using both ammonia and coal as fuel in hitherto coal-fired power plants. Japan’s JERA, the nation’s largest power generation company, will be conducting a test run[48] of co-firing at its coal plant in Aichi, employing a fuel mix of 20 per cent ammonia and 80 per cent coal. JERA aims to move the fuel mix to 50-50 during the 2030s and then phase out coal entirely in favor of ammonia by the 2050s. Japan also eyes exporting the technology across Asia with Mitsubishi Heavy Industries developing[49] boilers and gas turbines for ammonia co-firing.

To achieve the desired carbon-neutral outcome, Japan and other Asia nations using co-firing as an intermediate step will need to import African-produced green ammonia. Japan is also endeavoring to develop[50] a prototype 100% ammonia-fired powerplant by 2030. In parallel, Japanese energy diplomacy has been seeking to develop a wider East Asian fuel ammonia ecosystem. On 10 January 2022, Japan signed a Memorandum of Cooperation[51] (MOC) Indonesia, 62.5%[52] of whose power is generated from burning coal, to cooperate in the development of fuel ammonia technology. Two days later, Japan signed an MOC[53] with Singapore to establish ammonia supply chains to “serve both Japan and Singapore markets, and broader demand in Asia-Pacific markets,” with the expressed objective to “explore Singapore’s potential to become a regional trading hub for hydrogen and hydrogen-based energy carriers.” On 13 January 2022, Japan also signed an MOC[54] with Thailand to assist in Thailand’s decarbonization efforts, including the use of fuel ammonia.

All three of Japan’s MOCs with its Southeast Asian partners envision cooperation on fuel ammonia and other climate-smart technologies as the means to achieve their respective climate commitments under the Paris agreement. So the path to a low carbon future for Asia goes is likely to go through Africa. With Africa-to-Asia green ammonia supply chains looming on the horizon, Asian companies like Singapore’s ENEO have a big part to play in unlocking Africa’s green hydrogen potential.

Author

This blog is authored by Professor Michaël Tanchum, a research fellow with NTU-SBF CAS, a non-resident fellow with the Middle East Institute’s Economics and Energy Program and teaches at Universidad de Navarra. You can follow him on Twitter @michaeltanchum. The author would like to thank Regan Marina Thomas and Rocco Schwerfel for their research assistance. The piece is originally published on Nanyang Technology University’s website.

References

[1] https://renewafrica.biz/green-hydrogen/study-estimates-africas-green-hydrogen-potential-at-us1-trillion-by-2035/

[2] https://iea.blob.core.windows.net/assets/6ee41bb9-8e81-4b64-8701-2acc064ff6e4/AmmoniaTechnologyRoadmap.pdf.

[3] https://oec.world/en/profile/hs/foodstuffs

[4] https://www.iai.it/en/pubblicazioni/food-energy-nexus-and-italy-morocco-cooperation

[5] https://www.euractiv.com/section/agriculture-food/news/europe-searches-for-alternatives-in-fertiliser-supply-battle/

[6] https://www.foodbusinessnews.net/articles/20163-high-fertilizer-prices-tight-supplies-may-adversely-affect-2022-acreage

[7] https://www.yara.com/corporate-releases/yara-implements-further-production-curtailments-in-europe/

[8] https://www.canalsur.es/noticias/andalucia/la-crisis-energetica-obliga-a-fertiberia-a-parar-su-planta-de-palos-de-la-frontera/1853033.html

[9] https://www.reuters.com/business/energy/basf-considers-more-ammonia-production-cuts-gas-supply-crunch-sources-2022-07-27/

[10] https://www.ft.com/content/736739a3-780d-4480-a398-37ce1edf99e8

[11] https://www.iai.it/en/pubblicazioni/food-energy-nexus-and-italy-morocco-cooperation