Dube TradePort-based hydrogen fuel cell manufacturer Chem Energy SA sees an enormous opportunity to start a hydrogen economy in South Africa, particularly as the country has a national green energy programme.

Hydrogen power generation can be expanded to bring innovative technology companies into South Africa to support growth and start the growth cycle, says Chem Energy SA director Hal Koyama.

“Hydrogen is the technology of today. There is a large-scale movement globally towards hydrogen fuel cells and the time is right now for South Africa. Government and forward-looking companies are urged to become involved in this transition. The products exist and the opportunity is now,” he comments.

“South Africa’s challenge is in adopting the technology and the government has an important role to play in supporting the hydrogen fuel cell ecosystem in South Africa and boosting foreign direct investment,” he adds.

The regulatory environment in terms of codes, standards, safety and more have been laid out internationally by countries leading the technological charge and these can be adopted locally, Koyama highlights.

The enormous potential for fuel cell technology to support power generation within South Africa and the continent was a key factor in Taiwanese heavy equipment manufacturer Chem Corporation’s decision to bring its technology to the country, set up production and establish a supply chain in the form of Chem Energy SA's R170-million factory in KwaZulu-Natal.

Further, there is a gap between investments that have already been made in hydrogen technology in South Africa and the government’s role in driving further investment by supporting commercialisation of the technology.

“The government could put in place incentives that make it attractive for companies to switch to hydrogen power generation locally. Instead of importing diesel generators as a stand-by for electricity outages, hydrogen fuel cells could be used as a direct replacement,” he says.

“Power is a challenge throughout the continent. We see opportunity in South Africa to support the network and other sectors, but we see a ten-times greater opportunity outside South Africa,” says Koyama.

Governments at national or regional level should establish a task force whose sole purpose is to find opportunities to get the commercialisation of hydrogen technology started.

The South African government is already working on the policies around hydrogen fuel cells, as well as localisation and commercialisation, which are key to kick-starting benefits and investment.

“It is localisation and commercialisation that drive new industry and set the social and economic multiplying effects into motion,” he emphasises.

Chem Energy SA uses methanol as the liquid carrier of the hydrogen in its fuel cells. Biomass, reverse electrolysis and carbon emissions can be used to produce methanol, and there are efforts under way in this field in anticipation of a hydrogen economy.

A less obvious element in the hydrogen economy, which is slowly becoming known, is that South Africa has the capability to make its own hydrogen fuel. Chemicals and energy multinational Sasol makes methanol as a byproduct of its processes, but, in the future, the country could have a completely renewable source of methanol and other power sources, thereby reducing its dependence on coal and imported fuel, says Koyama.

INTERNATIONAL PARTNERSHIPS
South African companies wanting to be part of the hydrogen fuel cell revolution should partner with international companies already producing key components for fuel cells, Koyama suggests.

“Bring them into the country and then develop the technology on top of what exists. Once the technology starts taking off, there will be significant product innovation,” he says.

An added advantage of partnering with global technology leaders and bringing the investment into South Africa is that it spurs more investments in support of that technology, developing existing industries and establishing new industries building an ecosystem that has a multiplying effect economically and socially, he adds.

Further, companies and entrepreneurs should focus on where future demand in hydrogen fuel cell technology is going to be, namely the underdeveloped areas in the technology such as the power electronics that are adapting the fuel cell.

Chem Energy SA manufactures a 5 kW/h hydrogen fuel cell, but products generating 100 kW/h are also in the pipeline and, at this power level, they could start to help State-owned power utility Eskom restore grid reliability.

LOCALISATION
“We have worked with several suppliers of printed circuit board assemblies, pressurised tanks, wire harnesses and other smaller parts. The selection process has been rigorous. It has taken time, up to two years, and a lot of investment, to get the selected suppliers approved.

"To date, we have achieved 20% content localisation with our target being 80% at full capacity,” says Chem Energy SA president Angelin Maharaj.

“Through the selection process, we have been able to develop these suppliers by changing the way in which they manufacture their product and helped get them certified to global standards. Some suppliers have made their own investments in machinery, processes, and skills to enable them to produce more cost-effectively and at the required quality.

“We are quite pleased with the quality and the cost of components that we are sourcing,” he says, adding that, once localisation starts, development and a multiplier effect start to take place in the supply chain.

For example, the wire harnesses used by Chem Energy SA leverages the automotive industry supply, the sheet metal enclosures produced in Durban are sourced from an aluminium producer in Pietermaritzburg and the methanol in the fuel cell is produced by Sasol.

Further, various platinum group metals components support the local mining industry and mining jobs.

A survey of potential African countries showed South Africa had the infrastructure and a workforce with a high level of skills that were completely applicable to their technology. The outcome is all employees are South African and drawn from the greater Durban area.