Green hydrogen can float Nelson Mandela Bay’s economy

Kelvin Naidoo
Image: Supplied

Low-carbon hydrogen is anticipated to play a significant role across the world by 2040, in reducing greenhouse gas emissions and meeting climate-change goals — and Nelson Mandela Bay has an opportunity to be in on the ground floor of this global shift.

The World Energy Council estimates that, based on early technology deployment of low-carbon hydrogen, demand for it will exceed that of current fossil-fuel-based hydrogen over the next 15 years.

Low-carbon hydrogen — produced with renewable energy and/or with lower carbon emissions in production — is expected to move rapidly from pilot projects and early-use-cases to deployment at scale in heavy-duty transport and industrial processes.

Developing and scaling-up low-carbon hydrogen could help Africa in meeting key UN Sustainable Development Goals in energy access, energy independence, food security and local employment, the council states.

They highlight the continent’s sizeable renewable energy resources for low-carbon hydrogen production and its wealth of the mineral resources that play a key role in new energy technologies — advantages which particularly apply to SA too.

Green hydrogen is identified in SA’s national investment strategy as one of the “frontier strategic sectors” to attract new foreign and domestic investment, estimating that the sector has potential to add 3.6% to GDP and 370,000 jobs over the next two decades.

Nelson Mandela Bay is poised to be a key player in this new sector, as the destination for the planned R109bn  Hive Hydrogen green ammonia plant in the Coega SEZ, representing the largest ever inward investment into SA.

Hive estimates that thousands of new direct and indirect jobs will be created in the project’s first phase, for which the planning to come online in 2029 is far advanced, with land secured, substantial renewable energy input secured, and an off-take agreement in place for export to the Far East.

While the green ammonia (as a carrier for hydrogen energy) is largely destined for export, the planned investment holds a number of environmental and economic benefits and opportunities for the Bay in addition to the direct positive impact in job creation.

The plant will be entirely powered by dedicated renewable energy (wind and solar), and will add to energy security for local industries through an agreement in place with the municipality to “feed in” to the local grid.

Its use of renewable energy will strengthen grid capacity for other renewable energy projects.

A desalination plant to supply the water for the electrolysis process that produces hydrogen will process by-products on land, so that discharges such as brine do not impact marine life, and it will supplement the Bay water supply with surplus clean water.

The market applications for green hydrogen include fuelling heavy road, rail and maritime transport as well as hydrogen fuel cells for new energy vehicles.

Its use cases are also in the production of green chemicals and green fertilisers, and power for energy-intensive industries, particularly in heavy industry that is otherwise difficult to decarbonise, such as steel, cement and petrochemicals.

Local applications in transport are still a way off and likely a more long-term benefit of having the world’s biggest green ammonia plant on our doorstep, though it is hoped that the potential for greener public transport and freight are taken up as a priority.

The more immediate benefits we see for the Bay are in attracting materials and equipment manufacturers and suppliers as a supporting cluster to the plant, as well as the new business opportunities it creates for the services sector and the spin-offs into retail, hospitality and tourism.

There are substantial opportunities for local businesses to diversify, and for the Bay to attract investors, in the downstream hydrogen value chain, for example manufacturing of electrolysers (to make hydrogen), of fuel cell catalysts and fuel cells, small-scale hydrogen combustion engines, and batteries.

There are also opportunities for applications of green ammonia in chemical, fertiliser and cement manufacturing, with prospects of established local industries transforming to green outputs in demand in international markets.

It’s all very well to talk about potential and opportunities; what is critical is to turn those opportunities into reality.

Which is why the business chamber has set up a Local Economy Reinvention Think Tank, to unpack all these potential opportunities, to align with the strengths and capabilities of our local manufacturing industries, and conduct feasibility studies to present business with viable prospects for expansion, diversification and investment.

In Nelson Mandela Bay, we can make the opportunities work for us by working together to understand the challenges, get ahead of the coming change and take advantage of the opportunities coming our way.

Kelvin Naidoo is the vice-president of the Nelson Mandela Bay Business Chamber and Local Economy Reinvention Think Tank Overall Lead.



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