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Apr 05, 2022
Will Africa become the new green hydrogen “El Dorado”?
Key implications
- Ten green hydrogen projects are at various stages of development in Africa.
- Africa has land mass and sunlight, two key characteristics and project requirements supportive of green hydrogen production.
- In Africa, 593 renewable power plants are operating with a total capacity of 64,000 MW and 580 projects are planned with a capacity of 152,000 MW (see Figure 2).
Can Africa become a place where advanced science can be applied and contribute to improving the environment, i.e., an "El Dorado" in the new green economy? The global transition to lower carbon energy sources draws attention to renewables and green hydrogen as alternatives to fossil fuels. Some of the largest markets in Africa have taken important steps to evolve their economies away from highly polluting sources of energy (e.g., woodfire) by implementing strategies that combine "bridge" or "transition" fuels such as LPG and longer-term low-carbon solutions such as renewables. Green hydrogen consumption is expected to grow significantly over the next decades as transport (e.g., aviation, shipping) and heavy industry (e.g., steel, aluminum, cement, chemicals) sectors decarbonize their operations (see Figure 1).
Considering the renewable energy potential of many African countries, green hydrogen represents a great opportunity for the continent to transform its energy and economy sectors. Furthermore, Africa, as a source location of green hydrogen has the potential to emerge as cost-effective worldwide supplier of green hydrogen. Egypt, Mauritania, Morocco, Namibia, Niger, and South Africa are planning large-scale hydrogen projects (see Table 1) and the momentum is building.
African hydrogen production has the potential to play a major role in the lower carbon energy supply diversification strategy of European Union countries. Africa has a few characteristics supportive of green hydrogen projects, namely a large land mass sunlight for green power production. Collaboration between the European Union and interested African parties on both continents would facilitate progress toward country and company-specific plans aligned with 2050 net-zero emissions targets.
Egypt—Ain Sokhna (Scatec-TSFE-EBIC)
Scatec, The Sovereign Fund of Egypt (TSFE), and Egypt Basic
Industries Corp (EBIC) Fertiglobe's subsidiary entered into
agreement in October 2021 to develop a 50-100 MW green hydrogen
facility through electrolysis. A 100 MW capacity was fixed a month
later. Plus Power Inc will be providing the electrolyzer. Orascom
Construction was appointed as the builder in late November 2021,
with works being scheduled to start in November 2022 at the
earliest. The production could be starting from 2024. The hydrogen
will be sold to the ammonia plant nearby Egypt Basic Industries
Corp (EBIC) under a long-term purchase contract.
Egypt—Ain Sokhna (Scatec)
Another green hydrogen project—to be developed by Scatec
only—was announced in December 2021. A memorandum of
understanding (MOU) was signed on 10 March between Scatec, TSFE,
Suez Canal Economic
Zone general authority (SCZONE), and New and Renewable Energy
Authority (NREA) to develop a 1 MMt/y green ammonia plant in Ain
Sokhna industrial zone.
Egypt—Port Said (H2-Industries)
In mid-February, H2-Industries received a preliminary approval to
develop a waste-to-hydrogen plant in East Port Said. The project is
named "1 GW LOHC hydrogen hub at East Port Said." This type of
hydrogen plant would be the first to be deployed in the world. The
study is expected to be completed soon and will be sent to the
government for approval. The plant will be able to process 4 MMt/y
of organic waste and non-recyclable plastic, with which it will be
able to produce 300,000 metric tons per year of hydrogen.
Egypt—Port Said (Siemens)
In August 2021, Siemens Energy and Egyptian Electricity Holding
Company (EEHC) signed an MOU for developing a 100-200 MW
electrolyzer in the Industrial Zone of East Port Said (EPSIZ). That
hydrogen would be sent to a green ammonia plant for bunker fuel
replacement for shipping.
Egypt—Port Said (ThyssenKrupp)
In November 2021, Eni, General Electric, and Thyssenkrup have
submitted a $2 billion bid for the development of a green hydrogen
production plant. ThyssenKrupp was selected in late 2021 to build
the plant, along with a green ammonia plant. Its production would
be used for export to Germany. In late January, an MOU was stated
to be in preparation.
Mauritania—Project Nour
Chariot has signed in September 2021 an MOU with the Ministry of
Petroleum, Mines, and Energy of Mauritania to develop a large-scale
green hydrogen project. The partnership will develop a potential 10
GW green hydrogen facility named "Project Nour." The project would
cover an area of 14,400 sq km onshore and offshore, producing power
from solar and wind resources for electrolysis to produce green
hydrogen. The green hydrogen would then be exported to the
international market, particularly Europe. The feasibility work to
assess the wind and solar resources, and environmental impact and
social impact studies should start soon.
Morocco—Guelmim-Oued Noun
Morocco has adopted a national policy for the development of green
hydrogen projects in 2021. Morocco wants to impose itself worldwide
as a leader in this sector. Total Eren announced in January that it
will invest $10.69 billion for the realization of a project for
production of green hydrogen and green ammonia in the region of
Guelmim-Oued Noun. The hybrid project will generate more than 10 GW
by combining solar and wind energy. Topographic studies of the site
covering an area of more than 170 sq km, analysis of the renewable
resource, and preliminary design have already been carried out. The
Guelmin-Oued Noun project should enter its active phase by 2025 and
first production is expected by 2027.
Namibia—Tsau Khaeb
In early November 2021, Namibia selected Hyphen Energy as preferred
bidder to develop the country's first large-scale green hydrogen
project in the vicinity of the Tsau Khaeb National Park. This site
is considered as an ideal location thanks to its extensive
combination of solar and wind resources and proximity to the ocean
(i.e., a water source) and the port of Lüderitz for export options.
Developed in phases, the project is set to ultimately produce
300,000 metric tons per year of green hydrogen, for the domestic
and international markets, along with 2 gigawatts (GW) of renewable
electricity by 2026 at an estimated cost of $4.4 billion. Further
phases of development in the late 2020s will scale up to 3 GW of
electrolyzer capacity and 5 GW of combined renewable
power generation for a total estimated cost of $9.4 billion. The
production will serve either as pure green hydrogen or will be
converted into green ammonia.
Niger—Ganaram
In February, the government of Niger has signed an agreement with
German company Emerging Energy Corporation (EEC) to develop the
hydrogen market. The government has given the green light for
the
exploration and development of green hydrogen projects. EEC plans
to implement an electrolysis technique based on clean energy. This
project should help decarbonize oil field operations and
refineries. The green hydrogen produced in Niger will also be
exported to the international market, particularly to Europe and
America. This project is still at an early stage in comparison with
most advanced projects in other African countries.
South Africa—Boegoebaai
In October 2021, the Northern Cape Development Agency inked an MOU
with Sasol to conduct a 24-month feasibility study to assess the
potential of the Boegoebaai location to act as an export hub for
green hydrogen and green ammonia and the phases of development.
Boegoebaai is a port in the Namakwa Special Economic Zone, 60 km
north of Port Nolloth. Classified as a Strategic Integrated Project
in South Africa's National Development Plan, the project has the
potential to produce up 400,000 metric tons per year of green
hydrogen requiring an estimated 9 GW of renewable electricity
generation.
Learn more about S&P Global's Midstream Oil & NGLs research, analysis, and insight.
This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.
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