FUELING A HYDROGEN ECONOMY
Critical role for IDC in development of local hydrogen economy
By Joanne Bate – COO – IDC
The growing interest in alternative and cleaner sources of energy in South Africa and across the world is driven by, amongst other things, sustainable development priorities, commitments to achieve the Paris Climate Agreement of 2015 and the goal to achieve net-zero emissions by 2050.
As a developing country with abundant natural resources and renewable energy sources, South Africa is well-positioned to capitalise on this global opportunity. Our natural resources – solar, wind, biomass for power generation – skills and technological capacities put us in a prime position to take the lead in the emerging hydrogen economy and the green hydrogen value chain for the benefit of all South Africans, establishing our country as a leading supplier to the world green market.
The strategic position we occupy has a solid foundation. As early as 2008 government led the way with policy direction. The Department of Science, Technology and Innovation launched Hydrogen South Africa to develop a hydrogen roadmap to integrate and create an inclusive hydrogen society. The focused efforts have led us to this point. The opportunities in green hydrogen are clear.
Hydrogen is exceptionally energy-dense per unit of weight and is no more difficult to store and transport than liquified natural gas (LNG). Through its direct combustion, its use in fuel cells and its use as an industrial feedstock, it can decarbonise a greater range of sectors than renewable electrical energy alone. Hydrogen can be produced in collaboration with renewable energy almost anywhere in the world. Importantly, in the context of global climate change, the use of hydrogen that is produced from renewable energy produces no carbon emissions.”
Earlier this year government entrusted the Industrial Development Corporation (IDC) to be the development and commercialisation champion of the hydrogen economy. Sustainable development and investing in large-scale projects with meaningful economic and social impact motivates IDC’s investment decisions. The Corporation is alive to the reality of climate change and adopted a guideline in 2020 to halve its exposure in coal investments by 2025. Moreover, the IDC is already an active promoter of the green economy. The Corporation’s exposure to this sector has grown to R14bn, further underscoring our commitment to supporting technologies that seek to promote and support the growth of clean energy sources.
The IDC will focus on identifying investment opportunities that will be progressed to enable pilot projects to be implemented in the short term. The Corporation will support sector linkages critical to developing and extracting value from the entire green hydrogen value chain. Interactions thus far with stakeholders have been positive and, some companies are well poised to seize future opportunities in the commercialisation of the green hydrogen economy. Providing a comparative advantage is the fact that South Africa holds more than 80% of the world’s platinum reserves and is home to the largest platinum mining companies in the world. Platinum is a key component of fuel cells.
Central to our success will be private and public sector collaboration that enable us to commercialise the opportunities that the hydrogen economy provides us. Appropriate national policies, strategies and regulations lay a solid foundation for progress. IDC believes that the government has already provided policy direction. What remains is for all stakeholders to play their respective roles and, amongst other things, bring their expertise, funding capabilities and a commitment to co-operate in value chain development – supporting industries and downstream adoption of hydrogen technologies. This will ensure that we convert the opportunity and drive our country’s just energy transition.
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