Gas infrastructure, improved market conditions key to SA fuel cell industry success

6th November 2015 By: David Oliveira - Creamer Media Staff Writer

Gas infrastructure, improved market conditions key to SA fuel cell industry success

JOHANNESBURG ( – Stationary fuel cell technology could be the key that unlocks primary platinum demand and reinvigorates South Africa’s ailing platinum mining industry.

Trade and Industry Minister Dr Rob Davies concurs with this view, and has stated that the country needs to commit to 1 000 MW of platinum fuel-cell-generated power by 2020 to help alleviate pressure on the national grid.

Speaking at the April launch of a 100 kW stationary platinum fuel cell at the Chamber of Mines’ (CoM’s) offices, in Johannesburg, he pointed out that South Africa was well posi- tioned to take advantage of the technology, as it held about 80% of the world’s known platinum reserves.

The CoM has added its support to the technology, with CEO Roger Baxter saying that, as the global economy moves into a future powered by clean energy, platinum will play a particularly important role in the development of stationary and mobile fuel cells.

The Department of Trade and Industry has also announced the designation of a platinum-focused special economic zone (SEZ), the Platinum Valley SEZ, in Rustenburg, in the North West, which will primarily focus on fuel cell technology. The 100 ha SEZ will be located in the Bodirelo industrial park.

However, pundits argue that gas infrastructure and improved market conditions are vital to facilitate the development of a fuel cell industry in the country.

Black-owned energy solutions provider Mitochondria Energy Company technical head Etienne Gerber tells Mining Weekly that one of the most significant hurdles to the development of a fuel cell manufacturing sector in South Africa is the availability of gas feedstock.

Platinum mining major Impala Platinum (Implats) technical service executive Martyn Fox agrees, adding that a fuel cell manufacturing hub in the platinum-rich Rustenburg area will help facilitate development of the industry, but only if the country can deliver sufficient gas feedstock through infrastructure to fuel the technology.

Current fuel cell technology uses hydrogen or natural gas – which is cracked to create the requisite hydrogen – as feedstock to generate power.

Gerber asserts that government support could help promote fuel cell manufacturing the way it did for other alternative energy sources, particularly those supported by the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). He highlights that a presentation by the Council for Scientific and Industrial Research in January this year showed that solar power tariffs were introduced at R3.40 kW/h during the first round of the REIPPPP and dropped dramatically to R0.80 kW/h by the fourth round. Wind power tariffs also dropped – from R1.40 kW/h in to R0.60 kW/h in rounds one and three respectively.

Gerber points out that concentrated solar power (CSP) tariffs in Round 1 were R3.40 kW/h, but dropped to only R3.10 kW/h by Round 3. He asserts that if stationary fuel cell technology were to be included in an independent power producer programme, the tariffs will be introduced at a lower price than current CSP tariffs and will progressively drop as demand and local manufacturing start to support economies of scale.

However, he says sufficient local demand will be key in ensuring global leaders in fuel cell technology establish manufacturing facilities in South Africa.

Global production of fuel cell technology increased by 238% from 2009 to 2014, with the $300-million sector developing into an industry of more than $1-billion during the same period, which underlines fuel cell technology as a rapidly growing demand sector, states Gerber.

“If South Africa can enter the market early, we can make a significant impact . . . and generate export revenue for the country.

“A fuel cell manufacturing sector will stimulate the mining industry and create significant job opportunities. However, there needs to be a cash investment to help stimulate the local market first.”

He adds that the global market is expected to continue on its growth path and will be a major driver for increased platinum demand, which will help promote demand for primary platinum that has been adversely affected by the dominance of secondary supply generated by platinum recycling initiatives.

Fox says, if fuel cell technology becomes more widely adopted, “it would do for platinum demand what autocatalysis did. However, until then, it is just a blip, which is why government needs to assist through grants and the development of a platinum-focused SEZ”.

Promoting Platinum Demand
Implats has championed the move to stimulate primary platinum demand by announcing the development of its own stationary fuel cell baseload system at its Springs refinery, in Ekhurhuleni. The plant, which was initially expected to come on line early next year, will provide an initial 1.8 MW for the operation and will ramp up to 22 MW.

Fox tells Mining Weekly that, owing to difficulties pertaining to finalising financing agreements for a special purpose vehicle to manage the facility, the Phase 1, 1.8 MW plant is now likely to only come on line by mid-2016. The initial load will be created by 18 modularised fuel cell units, similar to the 100 kW system unveiled at the CoM.

Like the system at the CoM, the units used at the Springs refinery will be manufactured by Japanese fuel cell specialists Fuji Electric. However, the feedstock will differ – the CoM receives natural gas from Johannesburg-based gas reticulator Egoli Gas, whereas Implats will use the excess hydrogen it receives from industrial and speciality gas company Air Products.

Fox adds that the design of the 1.8 MW plant was sized according to the additional availability of hydrogen feedstock, which is used during the refining process.

Phase 2 of the project will comprise segments of 8 MW and 12 MW using 400 kW units with natural gas feedstock. Implats fuel cell coordinator Fahmida Smith explains that the segmentation of Phase 2 will help ensure that it can progress smoothly, while the company engages in a formal environmental-impact assessment, which is a legal requirement when developing a plant exceeding 10 MW.

Fox highlights that stationary fuel cells will help ensure security of supply at the Springs refinery, should there be an interruption in the national grid, and it could provide an opportunity to go off-grid completely. He adds that plants with critical power requirements must have backup power generation to ensure safety and, as such, the Springs refinery installed large diesel-fuelled generator sets, which are significant greenhouse-gas emitters.

Conversely, fuel cells are also very low greenhouse-gas emitters, Fox notes, explaining that water is the only by-product when using pure hydrogen as feedstock, while the natural gas-fuelled systems emit carbon dioxide, a far less harmful gas, compared with the carbon monoxide emissions of diesel-fuelled generator sets.

Smith points out that Implats was conservative in quantifying the added benefits of its fuel cell project when developing its financial model. She asserts that the project would be financially more attractive if the heat capture and carbon tax reductions were included, particularly since South Africa will employ a carbon tax, which is expected to be implemented early next year.

Meanwhile, Implats is also aiming to employ fuel cell technology on its underground load-haul-dump (LHD) vehicles, with studies determining the feasibility of a variation that uses liquid fuel as feedstock, rather than gas, under way. The technology also uses lithium batteries to help improve efficiency.

Fox notes that the company is working with three local LHD manufacturers to find the best solution and will proceed to the working- prototype phase once it has secured funding for the project.