Energy expert Hilton Trollip said hydrogen “is the holy grail in South Africa”, with it promising to reindustrialise the country and create thousands of jobs.
Trollip was speaking to Newzroom Afrika about the new South Africa-Germany hydrogen task force created at the end of June to facilitate the creation of green hydrogen in South Africa.
Green hydrogen is produced using renewable energy instead of traditional methods, which are fossil fuel intensive.
The joint declaration of intent was signed on 27 June by Electricity Minister Kgosientsho Ramokgopa and Robert Habeck, the German vice-chancellor.
The task force aims to assist the development of commercial green hydrogen projects and infrastructure in both nations, the Ministry of Electricity said in a statement.
South Africa’s abundant wind and solar resources, which would provide the energy to split water, and the nation’s deep capital markets have positioned it to become a major producer of green fuel
However, Trollip said, “South Africa cannot survive only on its local capital, it needs foreign investment to make this work”.
More importantly, the country needs German technology and knowledge to develop a green hydrogen industry that barely exists at the moment.
Germany will also be a vital trading partner when South Africa can commercially export green hydrogen, as it is one of the world’s largest economies looking to decarbonise its industrial base.
South Africa is poised to benefit greatly from the production of green hydrogen as its potentially abundant renewable resources and platinum reserves make it one of the cheapest places in the world to produce green hydrogen.
The country’s greatest benefit is not exporting green hydrogen but beneficiating South Africa’s mineral reserves.
“This is the holy grail in South Africa. To not just export minerals but to beneficiate our minerals before export,” Trollip said.
For example, 80 million tonnes of iron ore is exported from South Africa annually without any refinement.
There is a good opportunity to reindustrialise the South African economy by beneficiating this iron ore in South Africa before export.
If done with green hydrogen, the country could export ‘green’ iron and steel, which is tremendously valuable and in great demand in more developed economies.
This would result in economic growth and employment, with an International Development Corporation and Development Bank of Southern Africa study estimating the green transition could create 460,000 jobs in South Africa by 2025.
This has already begun with Sasol and ArcelorMittal joining forces to produce ‘green’ steel from iron ore mined in Sishen and exported through Saldanha Bay.
The initiatives could help revive ArcelorMittal’s Saldanha Works plant, which was mothballed in 2019, starting with a study of green steel using hydrogen produced from renewable energy.