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Green hydrogen will boost jobs, drive low-carbon future for South Africa
09 June 2021IHS Markit Energy Expert
"Super Hydrogen H2igh Road" offers win/win for
economy and environment
A new study shows how green hydrogen can lead to a "Win, win"
for South African employment and for the government's
decarbonization goals.
The global information and insight company IHS Markit (NYSE:
INFO) today publishes the results of a detailed, sector-by-sector
study of South Africa's future opportunities to use the country's
resources of wind and sun to produce low-carbon hydrogen—for
export and for use in the home economy.
The independent study was commissioned by Agora Energiewende, a
non-profit thinktank supporting the energy transition.
The study's research, grounded in today's realities of South
Africa's coal-dependent energy and industrial systems and of
current economic and social challenges, concludes that South Africa
is well-placed to pursue a national strategy based on low-carbon
hydrogen.
A global context. IHS Markit is respected
worldwide for its knowledge and analysis of major global industrial
sectors: refining, chemicals, steel, energy. These are set to be
transformed as the developed world introduces increasingly
stringent measures to reduce greenhouse gas emissions.
Hydrogen as key to deep decarbonization.
"Renewables in the power sector with progressive coal retirements
can directly eliminate only 40 to 45% of total South African
CO2 emissions," says the study. "Gradual adoption of
electrification alone will not be sufficient. Green hydrogen
enables a push to deeper decarbonization."
A "H2igh Road" scenario. As costs
for producing green hydrogen drop worldwide, South Africa's
resources of wind and sun can be developed to deliver benefits
beyond the power sector. They can combine with the country's
industrial expertise and existing investments to create a
new-generation synfuels industry, backed by hydrogen electrolysis.
A "hydrogen high road" offers both an economic boost - and
thus an increase in jobs - and a deeper and faster route
to decarbonization.
More jobs, lower emissions. The study compares
this scenario to a scenario of "inertia" based on South Africa's
current industrial and power sector trajectory. The "high road"
scenario quantifies the potential increase in employment at over
370,000 additional jobs[1] by mid-century - benefitting all regions of
the country[2], and spreading across a range of employment
sectors. Emissions of CO2 would also decrease by 70
percent.
Export markets and the home economy
Export opportunities will be available as European and Asian
countries recognize they need large-scale imports of green hydrogen
to meet their own decarbonization targets. The study favourably
compares the economics of transporting green hydrogen from South
Africa to the Netherlands and to Japan with other potential
hydrogen exporters in the Middle East, North Africa, and
Australia.
Key domestic sectors that would become major users of hydrogen
include the synthetic fuels industry (saving 48 million tonnes of
CO2 emissions per year), steel (saving 10 million tonnes
of emissions), and chemicals and refining (saving 1.5 million
tonnes). Remote- and heavy-duty vehicles would see, where battery
solutions are not viable, a savings of 8 million tonnes with a 25%
shift to hydrogen fuel cells. Industrial processes where
electrification cannot meet their specific combustion or heat needs
would realize a savings of up to 4 million tonnes.
Policy and regulatory framework
A national hydrogen strategy will provide an important framework
for working towards these goals. Such a strategy would look to
adapt the policy and regulatory environment to provide support to
risk-taking private sector capital. Key insights from the study
include:
Grid integration, and new rules to allow better wheeling of
electric power, are important for obtaining the best synergies
between hydrogen manufacture from electrolysis and variable (wind
and solar) renewable power generation.
Funding support can preferentially be targeted from
green-focused recovery programs in Europe and other OECD countries,
especially where these look to support host country import needs or
offer markets for their technology. South African state funding
would not need to be a frontline policy.
Government-led mandates for sustainable product and material
usage, and corporate pledges to improve supply chain
sustainability, have a significant role to play and need
encouragement.
Each major development for hydrogen supply (the study
identifies several "early stage" low-regret projects) should be
sized to give additional capability to prime and support
smaller-scale use in domestic "Hydrogen Zones" for green product
manufacture and fleet-fuelling stations. Coordination of anchor
demand loads and of storage facilities can be a valuable supportive
aim of policy.
The study concludes that with a supportive commercial and policy
environment, a production of 3.8 million tonnes per annum of
hydrogen could be developed in South Africa by 2050 (0.75 mtpa by
2030). Of this, over 2.0 mtpa would be for domestic consumption -
equal to between 6 and 8 percent of final energy demand. This share
is in line with study authors' IHS Markit projections for leading
developing economies globally.
IHS Markit's Senior Advisor for Global Energy Dr. Andy Barrett,
lead author of the study, said: "The conclusion of our work is that
these goals represent a serious and feasible ambition to deliver
the combined economic and decarbonization benefits of low-carbon
hydrogen for South Africa. A national hydrogen strategy in line
with this ambition will bring planning for hydrogen up to speed
with and comparable to the way that some 20 countries and regions
around the world are already approaching this new and exciting
industrial opportunity.
"We would expect such hydrogen development to be aligned with
other measures for decarbonization including aggressive renewables
penetration of the electricity sector, efficiency improvement and
progressive electrification of industry energy use and acceleration
of electric vehicle penetration into the LDV fleet."
Jesse Scott, International Director of Agora Energiewende, said:
"The goal of a hydrogen strategy would be to underpin the drive for
country-wide decarbonization, and to support the achievability of a
mid-century net zero target for GHG emissions."
[1]
76,000 in operational positions for renewables and hydrogen
production; 22,000 long-term sustainable construction jobs; and
over 290,000 in manufacturing and logistics supporting input and
services in the enhanced green economy. The study estimates that
25% of these additional jobs can be realized by 2030.
[2]
Gauteng Province benefits most, with a 130,000 net employment gain.
Cape provinces gain 93,000, and Mpumalanga Province, which bears
the largest impact in terms of employment moving away from coal
(around 7,000 would need to be redeployed) gains 36,000 alternative
jobs.