Africa could produce 30-60 million tonnes of hydrogen annually, with a $680bn to $1,300bn price tag, according to a joint report by Masdar and Abu Dhabi Sustainability Week.
The Africa’s Green Energy Revolutionreport has estimated that 20 to 40 million tonnes per year is likely to be for the export of pure hydrogen, ammonia, and synthetic fuels, while the remaining 10 to 20 million tonnes per annum would serve domestic demand in industry, mobility, and power sectors.
To enable the ambitious production rates, the report has predicted that 1,500-3,000TWh of renewable energy would be needed, more than 50 times the current African solar and wind production, which would take up the largest share of the estimated investment price tag, amounting to $115bn to $220bn.
However, the report has said that the potential for large-scale production in the region would create between 1.9 and 3.7 million jobs, having a positive gross domestic product (GDP) impact of $60bn to $120bn in 2050.
The report stresses that green hydrogen and the potentially positive impact on renewable deployment and society will not happen on their own. It states, “Both governments and the private sector must act to realise the full potential of green hydrogen.”
The report cites six key elements that could spur required investment:
- Integrated renewables-plus-hydrogen energy vision and masterplan To instil confidence among investors, countries need a clear renewables-plus-hydrogen roadmap that sets out clear ambitions and milestones.”
- Governance, (international) coordination, and mobilisation Governments should consider an internal coordination mechanism, like a specialised delivery unit, to ensure coordination and track delivery across these numerous stakeholders.
- A regulatory framework adapted to hydrogen exports at scale This includes having predictable tax regimes and contractual certainty presided over by effective courts and institutions.
- Infrastructure While it is unlikely that government finances will allow countries to make all these infrastructure investments from public funds, nations should engage in a strategic discussion on how such investments can be enabled and which assets governments should (co-) invest in to attract investments.
- Innovation and skills The envisioned GW-scale renewables-plus-hydrogen projects will require a skilled workforce to develop and build in remote locations that are traditionally devoid of infrastructure.
- Project de-risking mechanisms Green hydrogen export projects with a solid foreign offtake counterparty can act as anchor offtakes for large renewables volumes, thereby reducing the risk for investors.
