The United Kingdom has agreed to support South Africa’s green economy even further, with heavy investment planned for developing green hydrogen in the country.
South Africa has become a key locale for foreign investment in renewable technologies. Saudi-Arabia, China, as well as the USA and key economies in the European Union have pledged billions to the country’s transition away from coal.
President Cyril Ramaphosa visited the United Kingdom this week, meeting with King Charles III and the UK’s new prime minister Rishi Sunak. Following meetings with the UK government, the nations have agreed to implement the next phase of the UK-SA Infrastructure Partnership.
According to the UK government, the next phase aims to fund projects that will create investment opportunities for UK companies upwards of £5.37 billion over the next three years and assist South Africa with its economic growth, skills development and push towards renewables.
Included in this is new grant-funded technical assistance to South Africa to unlock green hydrogen opportunities. The exact amount committed to this initiative was not disclosed.
Launched under South Africa’s recent Just Energy Transition Partnership, the UK seeks to collaborate with South Africa on new renewable energy sources.
One of these is green hydrogen – a process whereby an alternative fuel in the form of hydrogen is extracted from water through electrolysis. The extraction process is, however, wholly powered by either wind, solar or a combined method.
South Africa, alongside other Sub-Saharan countries, is among the world’s leading producers of vital minerals used in clean technology, including platinum group metals and iridium used for hydrogen production.
Rishi Sunak said: “South Africa is already the UK’s biggest trading partner on the continent, and we have ambitious plans to turbocharge infrastructure investment and economic growth together.”
Green ‘gold rush’
Green hydrogen has been getting a lot of attention in the renewable space as a future fuel, with many banking on it to become highly sought-after in the coming years.
According to Precedence Research, the global market for green hydrogen is anticipated to reach $89 billion by 2030, with a continuous annual growth rate (CAGR) of 54% from 2021 to 2030.
A recent South African Hydrogen Valley Feasibility Report showed that the cost of green hydrogen is predicted to be approximately $4 per kg by 2030 – a premium of between $2 and 2.5 per kg over that of hydrogen extracted from traditional methods.
Gladys Nabagala, a director of the energy transition advisory group at Royal HaskoningDHV, said that South Africa holds structural advantages that can assist in producing green hydrogen to export.
Nabagala said South Africa is in a perfect position to facilitate green hydrogen initiatives, such as:
- Its size and climate allow for some of the highest renewable energy loads from solar and wind;
- It has abundant land in proximity to oceans;
- It has infrastructure assets such as Sasol’s proprietary Fischer-Tropsch process that is used to produce synthetic hydrocarbons such as methane, diesel and jet full;
- It has world-class academic expertise in the field;
- Sasol’s ongoing investigation into green hydrogen at Boegobaai in the Northern Cape, backed by Ramaphosa himself.
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New ‘gold rush’ in South Africa catches the UK’s eye
