Electricity Minister Kgosientsho Ramokgopa. Picture: Supplied
CAPE TOWN - Green hydrogen was unlikely to feature in South Africa’s Integrated Resources Plan (IRP), according to Electricity Minister Kgosientso Ramokgopa.
He was speaking on the first day of the South African Green Hydrogen Summit, at the Century City Convention Centre, which ends on Tuesday.
“I’m not necessarily discounting it (green hydrogen). The IRP does three things: the first one is it determines the demand, then it talks to the source, and then it talks to the costs associated with the exploitation of that fuel source,” Ramokgopa said.
Green hydrogen has been hailed as a critical component in global transitions towards low-carbon and climate-resilient societies. The global market for green hydrogen is forecast to grow from $444 million in 2021 to about $4.4 billion by 2026.
Experts have estimated that green hydrogen production could potentially add between $4bn and $9bn to South Africa’s economy, and create between 14,000 and 30,000 jobs annually.
On Monday, the premiers of the Northern, Western and Eastern Cape provinces will sign a memorandum of understanding which will bind them to collaborate on the development of green hydrogen.
This will include the associated infrastructure and logistics networks, trade promotion and facilitation, and human capital development.
Ramokgopa said that the maturity of the technology to exploit green hydrogen so it could form part of the IRP was not yet advanced.
“Therefore the cost elements associated with green hydrogen are a bit more prohibitive. As you construct the IRP you (must) also have in mind the cost to the end-user; it’s got tariff implications,” he said.
Ramokgopa said many of the proposed green hydrogen projects were not yet at an advanced stage and required further investment.
“The major industrialised countries of the North are likely going to be prepared to pay an adjusted cost premium because they really want to get to the targets of the net-zero (carbon commitments),” he said.
Eastern Cape Finance MEC Mlungisi Mvoko said his province’s special economic zones, ports and logistic facilities were an advantage in facilitating the integration of green hydrogen into the mainstream economy.
“Therefore it is important for South Africa to collaborate with its neighbours in southern Africa to create a green hydrogen region of international significance. In order for us to be competitive, we should not act as individual provinces,” he said.
Mvoko said the memorandum of understanding sought to create linkages and synergies between the three provinces, as well as with the rest of South Africa and the region beyond the country’s borders.
The chief operations officer at the Industrial Development Corporation, Joanne Bate, said the Green Hydrogen Commercialisation Strategy, which had been spearheaded by the Department of Trade and Industry, underpinned that co-operation was necessary if South Africa was to realise its green hydrogen goals.