Africa and Europe set to be the dynamos for the global green hydrogen economy

Africa’s total announced electrolyzer pipeline capacity has reached 114 gigawatts (GW), with 61% of this tied to countries in Sub-Saharan Africa, according to Rystad Energy analysis. This African region has an announced electrolyzer pipeline of about 70GW, with Mauritania covering 50% of the total, followed by South Africa and Namibia. Sub-Saharan Africa holds a highly strategic position for the development of a successful green hydrogen economy as South Africa sits on about 90% of the world’s global platinum group metals reserves – critical for the production of polymer electrolyte membrane (PEM) electrolyzers.

The major impediment to building these mega projects and associated infrastructure will be investment. According to Rystad Energy research, just 13 megawatts (MW) of the planned 114 GW has reached a final investment decision to date. The continent’s access to land, low labor costs and renewable power potential has been attracting attention from further afield, with Germany signing offtake deals with Namibia and South Africa. Norway has taken a different approach by providing $8 million of funding to Scatec, a Norwegian renewable company, to develop green hydrogen projects in Egypt.

These initial moves are set to accelerate as Europe struggles with an ongoing energy crisis and seeks new partners. Part of the recently released European Union Green Industrial Plan seeks to promote renewable energy and green hydrogen projects across Africa, with an eye on establishing sustainable investment facilitation agreements to attract and expand regional investments. Germany alone intends to import 50% to 70% of its hydrogen to feed its domestic demand by 2030, with much being sourced from Africa. With plans to construct 17 GW to 21 GW of hydrogen-ready gas-fired power plants by 2030, Germany’s commitment to the green hydrogen economy is substantial. To facilitate imports, Germany recently launched a €900 million ($957 million) auction scheme called H2Global, securing purchase guarantees for hydrogen producers outside of Europe exclusively. According to Rystad Energy analysis, African states are currently in the best position to supply green hydrogen in the quantities Europe requires.

Learn more: RystadEnergy