Recently, the Saldanha Bay Innovation Campus (SBIC) – a programme of the Saldanha Bay Industrial Development Zone (SBIDZ) – staged a series of webinars around the challenges and opportunities presented by the energy transition.
The second of these focused on Saldanha Bay as a potential hydrogen hub. Following the keynote speech by Thomas Roos from the Council for Scientific and Industrial Research (CSIR), moderator Adinda Preller, SBIDZ Executive: Transaction & Investor Support, led a panel of experts in an in-depth discussion on the topic. Roos was one of the authors of a recent CSIR study that showed the region could generate power fuels based on renewable hydrogen and was well placed to export power fuels to Northwest Europe and the Far East at competitive costs.
The panel of experts included Katrina Abhold, Global Maritime Forum (GMF), MarlettBalmer, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) and George van Rensburg, Keren Energy.
Katrina Abhold, Project Lead: Global Opportunities at the GMF, works with the maritime industry in shaping the future of global seaborne trade to increase sustainable long-term economic development and human wellbeing. She explained why Saldanha Bay was a good location for a zero-carbon fuels hub and what creating a zero-carbon fuels infrastructure entailed.
These reasons included that Saldanha Bay is on a major bulk carrier shipping route and has excellent onshore and offshore solar and wind resource potential for sizeable renewable energy electricity supply at comparative industry costs.
Recognising South Africa’s developing hydrogen-powered economy, there is significant export potential in that interim – which may well stimulate local offtake, the decarbonisation of our economy and the creation of sustainable economic growth and jobs. So, it could be a win-win for both export and local offtake.
George van Rensburg, Managing Director of Keren Energy, a developer of energy projects, spoke about his company’s hydrogen research, development and innovation space and its pilot hydrogen project in Vredendal. He said this proved that Saldanha Bay could use solar energy to produce renewable electricity as molecules (hydrogen) rather than electrons. This, of course, would overcome the challenge of getting the fuel to the large European/Asian markets.
“In South Africa, hydrogen is used in the fuels and chemicals sector, and there is global interest in its use as a pathway to decarbonisation,” said Preller, citing the CSIR report and another from a Partnering for Green Growth and the Global Goals (P4G) partnership study by Ricardo and the Environmental Defense Fund. “The opportunities in hydrogen fuel will enable the industrial transformation required to reach decarbonisation climate change goals, especially in industries that seem wedded to fossil fuels.”
According to a report in The Economist, the “Hydrogen Council, an industry consortium, reckons some 350 big projects are underway globally to develop clean-hydrogen production, hydrogen distribution facilities, and industrial plants that will use hydrogen for processes now fossil fuels.”
More significantly for Saldanha Bay would be the possible reactivation of the ArcelorMittal steel plant. To produce “green” steel, it will need green fuel – green hydrogen is, at the moment, the best option. A direct-reduction process uses hydrogen to do what coking coal – a massive emitter of greenhouse gas emissions – did in the past. The steel company has stated its intention (in Europe) to spend $10 billion to reduce its greenhouse gas emissions and look to hydrogen as an alternative fuel source.
Such developments also present enormous opportunities for the community regarding job creation, skills training, innovation and technology investments, and increased foreign direct investment (FDI).
Furthermore, because of the wealth of experience in South African organisations, like SASOL, and through the development of the Renewable Independent Power Producer Programme (REIPPP), which firmly focused on how to structure community benefits, the development of a hydrogen hub would have significant benefits for the area, the region and nationally.
And there is a growing market – as a result of the Ukraine-Russia conflict and according to REPowerEU: Joint European action for more affordable, secure and sustainable energy, the European Union will increase its demand for larger volumes of renewable hydrogen imports. For example, Germany will require 2.7 million to 3.0 million tonnes of hydrogen fuel per year by 2030. Japan is looking at 5 million to 10 million tonnes by 2050.
There are significant potential community-level benefits of developing a green hydrogen economy. For example, to service the maritime sector, 80% of the infrastructure spending would need to be on the landside of the port. These included desalination plants, production and storage facilities, and retrofitting existing plants to deal with the transition.
There will be job creation in several areas. This could include the actual hydrogen production, the construction of desalination plants, production and storage facilities, and retrofitting of existing plants – maritime and other – to deal with the transition. In addition, there would be the expansion and refitting of the existing marine engineering facilities to cater to the future hydrogen-powered ships. But there will be the need to work with others to achieve this potential – this can be highly specialised work.
To realise this potential, we must undertake significant feasibility studies, coordinated planning and associated investments. Primarily what is needed is investment, innovation feasibility studies and collaboration. The costs and benefits of producing green hydrogen and its derivatives must be established. And that goes for financial, technical, economic, social and environmental elements. It must be multi-layered to ensure the opportunity is well defined and understood by stakeholders. Furthermore, an integrated and collaborative multi-stakeholder approach will be required to drive implementation between the different project components – electricity generation, hydrogen production and ammonia storage and logistics.
The community would benefit by the region becoming a hydrogen hub and, by extension, aport that would also use hydrogen fuel for its operations and contribute positively to the nation’s energy needs. In addition, switching to a more sustainable and environmentally friendly fuel source would improve air quality and the general environment. And because green hydrogen needs much renewable energy, it could help build overall energy resilience to the national grid and ease the burden for the rest of the country.
There is no doubt that decarbonisation policies are being applied across many industries and regions, including the maritime sector. SBIDZ is ideally positioned to become a forerunner of this new industry, powered by sustainable energy resources and able to provide a massive export and local offtake aggregator opportunity for the country.