Africa Has EUR 1 Trillion Green Hydrogen Potential: New Study

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A new report has said that harnessing Africa’s solar energy to produce 50 million tons of green hydrogen a year by 2035 can help secure global energy supply, create jobs, decarbonize heavy industry, enhance global competitiveness and transform access to clean water and sustainable energy. The analysis is commissioned by the European Investment Bank, the International Solar Alliance and the African Union, and supported by Mauritania government, HyDeal and UCLG Africa.

The report – Africa’s Extraordinary Green Hydrogen Potential – represents the first detailed research of the feasible development of green hydrogen across the continent.

The study highlights that solar powers green hydrogen is economically viable and can be produced at less than EUR 2 per kg, cheaper than traditional fossil fuel energy, and cater both for local energy demand and allow green hydrogen to be exported to global markets. This is equivalent to energy costs of $60 a barrel.

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The research suggests three requirements to enable 50 million tons of green hydrogen to be produced in Africa by 2035. First national planning, regulation and incentive schemes need to mobilise private sector investment. Then pilot projects need to show successful green hydrogen generation, storage, distribution and use at both demonstration and commercial scale. And finally, market-based partnerships are needed to enable mass-scale domestic and international off-take and demand for green hydrogen, and increase cooperation to design, finance, build and operate green hydrogen production, storage and distribution infrastructure.

The study says that EUR 1-trillion green hydrogen investment can deliver the equivalent of more than one third of Africa’s current energy consumption, boost GDP, improve clean water supply and empower communities.

“Africa has the best renewable energy in the world and scaling up production of green hydrogen can transform access to low-cost electricity and clean water. Unlocking Africa’s green hydrogen potential will require close cooperation between public, private and financial partners.” said Ambroise Fayolle, Vice President of the European Investment Bank.

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Dr Ajay Mathur, Director General, International Solar Alliance, stated, “Solar photovoltaic technology has provided us with the cheapest electricity. It will cost below €2 per kg in several African countries by 2030, much lower than the current mass assumption of €5 and a stark contrast to the $60-70 paid for an oil barrel. Thanks to this low-cost electricity and decreasing electrolyser costs, the next step is providing access to a clean fuel, cheaper than all the current fossil fuels. It will enable us to decarbonise the power sector and most hard-to-abate sectors – fertilisers, steel manufacturing, and refineries.”

The study was previewed at COP 27 in Sharm el Sheikh by all key stakeholders and the report was formally handed over to partners on December 20th.

The study also suggests that large scale green hydrogen investment can accelerate decarbonisation by enabling large scale African energy users. These could be fertilizer and steel producers that can employ green hydrogen.

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In many ways, interest in Africa as a hub for energy exports has spiked after Europe sought options beyond Russia for its energy supplies.  That means intent could be backed by some initial investments sooner than later, as Europe tries every possible option to seek long term energy security after what promises to be a difficult winter this year and possibly even the next.