Is Green Hydrogen Africa’s Answer to the Climate Crisis?

Part 2

By Soohyun Won – Intern at Art in Tanzania

“Africa could play a vital role in the future of climate change if aid is promised.” – William Ruto, President of Kenya

In response to the climate crisis, people worldwide have been paying attention to Africa as a continent that can provide clean energy and leverage as a driving force for growth. Among them, one notable resource is solar energy.

North African countries intend to use their best solar energy capabilities.

The Government of Tanzania has committed to increasing the use of renewable energy sources, including solar power, as part of its national energy mix. The country has significant potential for solar energy due to its abundant sunlight, and the government has established several initiatives and programs to promote the development and use of solar energy. For example, the government has established the Rural Energy Agency to promote renewable energy in rural areas, including solar power for lighting, cooking, and other applications.

Additionally, several private sector initiatives aimed at increasing the use of solar energy in Tanzania, such as developing solar power plants and distribution networks for households and businesses. The government is also working to improve access to financing for renewable energy projects, including solar projects, to encourage further investment and growth in the sector.

At COP27 in November 2022 (the 27th Conference of the Parties to the United Nations Framework Convention on Climate Change held in Sharm el-Sheikh, Egypt), United Arab Emirates global energy company Masdar said in a report that Africa could account for up to 10% of the world’s green hydrogen market by 2050. In particular, Morocco’s credit highlighted, noting that it expects to produce green hydrogen at less than $2 per kilogram in 2030 and less than $1 per kilogram in 2050. The report also said Morocco’s green hydrogen industry is expected to create nearly four million additional jobs and add $60-120 billion (about 76 trillion-152 trillion won) to the continent’s GDP by 2050.

This will be a significant achievement if it materializes, considering that Morocco’s GDP in 2021 exceeded USD 132 billion (about KRW 167.44 trillion). In September 2022, while Morocco was building its first green hydrogen production system, the International Renewable Energy Agency (IRENA) reported that Morocco is expected to produce the third cheapest green hydrogen by 2050.

Meanwhile, Tunur (TuNur: a renewable energy, storage, and transmission developer focused on Tunisia and the Mediterranean region) has committed to investing $1.5 billion (W1.9 trillion) in power plants in Tunisia. Considering that Tunisia’s gross domestic product (GDP) currently exceeds about $40 billion (about 50.74 trillion won), it is indeed a huge investment.

Like Morocco, Tunisia announced its green hydrogen strategy in 2022 and aims to pursue it by 2024. In partnership with multinational company Chariot Energy, Mauritania focused on Project Nour, which aims to make Mauritania one of Africa’s cheapest global green hydrogen exporters by leveraging its world-class wind and solar access.

Traps to Consider

Currently, many exciting projects are taking place across Africa. However, concerns about other factors, such as the bureaucracy of certain governments that could delay such projects and the risk of the investment not aiming to benefit residents, have been lingering. As a result, electricity utilization is often very low in some African countries, while electricity utilization is less than 50% in 24 countries. Therefore, governments and investors must improve their domestic infrastructure so that people across the continent can fully benefit from this energy transition.

Moreover, as the International Energy Agency IEA pointed out, Africa has 60% of the world’s best solar resources. Still, it is in the early stages of development, accounting for only 1% of the solar power capacity. The pipeline now aims to export natural gas from West and North Africa to Europe. In particular, Algeria is a natural gas supplier, particularly of fossil fuels. However, pipelines require repurposing and can be used to transport hydrogen. Critically, some observers have raised concerns about essential ‘extractionist’ projects.

Africa’s regional resources can aim to benefit global markets outside the continent at the expense of its local population. In addition, some investment projects could cause significant debt to African governments. There are undoubtedly positive aspects, and investment is essential, but whoever the initiator will be must ensure that extensive infrastructure development takes place so that ordinary civilians can also benefit, especially given the continent’s more comprehensive climate vulnerability.

If these projects are carried out ethically, the global and African economies will become more intertwined and positively contribute to the continent’s economic growth.

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