The advantages of green hydrogen technology to meet South Africa’s goals of transitioning to a lower carbon energy sector appear “uncontested”, says law firm Cliffe Dekker Hofmeyr (CDH).
To qualify as a form of clean energy technology (one that does not contribute to greenhouse-gas emissions and climate change), the electricity used in the electrolysis process of making hydrogen must be derived from renewable energy technology – thereby creating so-called “green hydrogen”.
The World Economic Forum explains that when hydrogen burns, the only by-product is water, which is why hydrogen has been an alluring zero-carbon energy source for decades, states CDH.
However, the traditional process for producing hydrogen, in which fossil fuels are exposed to steam, is not zero carbon. Hydrogen produced in this way is called grey hydrogen.
If the carbon dioxide generated from producing grey hydrogen is captured and sequestered (stored so that it is not released into the atmosphere), it is called blue hydrogen.
Hydrogen produced from coal is called brown hydrogen.
Green hydrogen is produced by the electrolysis of water – using an electric current to break water into its component elements of hydrogen and oxygen, with no other by-products. If the electric current used for the electrolysis is produced by a renewable source, such as solar photovoltaic or a wind turbine, then the clean hydrogen produced is known as green hydrogen.
Hydrogen can then be used to generate energy or electricity by using it in a hydrogen fuel cell. It can also be stored to be used later, or exported.
The primary production costs of green hydrogen comprise the cost of the renewable electricity supply, electrolysis and water supply.
SOUTH AFRICAN CONTEXT
In South Africa, CDH notes, utility-scale independent power producer (IPP) renewable energy projects are required to be dedicated to producing and selling power to Eskom, and are restricted from selling excess power to the national grid or to third parties.
As such, CDH notes that there is little opportunity for IPPs to contribute to green hydrogen production.
Nonetheless, the firm says that, according to a report by the Council for Scientific and Industrial Research (CSIR) released in February, South Africa’s extensive wind and solar resources provide a competitive advantage to produce and export green hydrogen.
In the report, the CSIR advocates for green hydrogen to be produced using dedicated renewable energy infrastructure (not Eskom-related IPPs), from which energy is supplied to green hydrogen electrolyser plants exclusively.
The key reasons for green hydrogen-specific renewable energy plants revolve around a minimum dedicated electricity supply being required to meet the recommended yearly full-load hours (FLH) for green hydrogen electrolysers.
Another reason includes the need for exclusive power plants being required because electrolysers have high capital costs and high use factors, resulting in high FLHs for the production of low-cost green hydrogen.
Being able to easily trace green hydrogen back to being made with solely renewable energy also means such hydrogen will be easily certifiable as that produced with low/zero-emissions origins.
DOMESTIC AND EXPORT MARKETS
Meanwhile, another critical consideration for green hydrogen production is water availability. CDH notes that because of shortages of water in South Africa, the requirements of achieving sustainable water resources for communities and the environment would likely be prioritised over the use of such water for green hydrogen production.
In this regard, the CSIR report makes a distinction between hydrogen produced for domestic inland use and hydrogen for export and coastal use.
In respect of hydrogen for export and coastal use, it recommends that the feedwater should be desalinated seawater and, therefore, export hydrogen should be produced at or near the port of shipment.
For the production of hydrogen for inland domestic use, the feedwater should be derived from desalinated or treated water from heavily-contaminated sources that are otherwise not treatable by municipal wastewater treatment plants. These include origins such as mine water, acid mine drainage and industrial wastewater.
“To produce green hydrogen at scale, it is evident that South African policymakers need to support a far higher allocation of renewable energy power generation development,” states CDH.
The firm adds that continued investment by both government and the private sector will have a significant positive impact on South Africa’s green hydrogen energy future, provided that the water is allocated and used in a responsible manner and the relevant policy and regulatory framework is created to support this technology type.