Every day, millions of engines and factories burn fossil fuels, releasing carbon dioxide – a greenhouse gas that traps heat in Earth’s atmosphere and contributes to climate change. Now imagine a clean fuel that does not pollute and produces only water as waste. That’s the promise of green hydrogen, which is made by using solar and wind power to split water into hydrogen and oxygen.
Countries worldwide, including South Africa, see green hydrogen as a vital tool for tackling climate change. There are plans to use green hydrogen in South Africa for everything from producing fertiliser for farms to powering factories and heavy trucks.
As governments worldwide push for green hydrogen as a clean energy solution, a critical reality is being overlooked: producing green hydrogen is only one piece of a complex puzzle. The success of green hydrogen projects depends on simultaneously developing infrastructure that will transport the green hydrogen to industry. It will also need industries to adopt new technology or convert existing equipment so that they can switch from using fossil fuels to using green hydrogen.
Producing one kilogram of green hydrogen needs up to 30 litres of fresh water. This means that desalination or water recycling plants will be needed if green hydrogen hubs are set up in water scarce areas.
Think of it like building a new railway system. You wouldn’t construct a train station without first laying train tracks and making sure that trains are available to run on it.
Yet South Africa aims to build seven gigawatts of hydrogen production capacity by 2030 – enough to power up to seven million homes at once.
We are chemical engineers, with over five decades of combined experience in the petrochemical industry, who have researched the potential for green hydrogen commercialisation in South Africa.
Drawing on our experience, our latest research is about why ambitious energy projects succeed or fail. We researched how to manage the risks of setting up a green hydrogen industry – from project execution through to market readiness – in a way that’s fair to both developed and developing countries.
To develop our risk assessment framework, we analysed historical data from pioneer energy plants globally and examined some of the challenges experienced by megaprojects (those that cost more than R20 billion or US$ 1 billion to build). We compared different ways to use green hydrogen by measuring how many CO₂ emissions are avoided for each ton of hydrogen used. This helped us understand which applications are the most effective for cutting emissions.
What our risk assessment found was striking: projects that rush to use new technology at a massive scale typically see their costs double or triple from initial estimates. And over half of these projects fail to meet their production targets in their first six months.
Our risk analysis also shows that the funds needed to build production plants globally, including in South Africa, are just a fraction of what it will cost to build a functioning green hydrogen economy. The government will have to take these risks into account or the result will be stranded assets: expensive facilities that can’t be fully utilised because the supporting infrastructure isn’t in place.
The risks we found
Hydrogen, including green hydrogen, can only be moved around through expensive specialised pipelines, or by being compressed using extreme pressure. Other ways to move it include first converting it into other chemicals like ammonia, or converting it to liquid form at -253°C. Up to 48% of the energy content can be lost in transportation alone through compression, liquefaction, conversion to carriers (like ammonia or methanol), and pipeline or shipping inefficiencies, all of which require significant energy input.
Most existing natural gas pipelines cannot handle pure hydrogen without substantial modifications. These technical complexities mean new infrastructure must be built almost from scratch.
If these hurdles in transporting green hydrogen are overcome, the next problem is that green hydrogen needs customers with facilities equipped to use it. For example, the steel industry is looking at moving away from polluting ovens to producing steel using green hydrogen. This would produce almost no carbon dioxide emissions but requires entirely new infrastructure.
Fuelling stations are another example. For an ordinary fuel station to be converted so that it could serve hydrogen vehicles, it would need either massive cooling plants and cryogenic storage tanks (which store liquefied gas at below -250°C) or high-pressure storage vessels and compressors. A hydrogen filling station would operate more like a small chemical plant than a conventional service station.
The South African government’s green hydrogen strategy wants to carry out 24 feasibility studies to see how green hydrogen could be made and used by local industry. There are also plans to export it.
But the cost of producing and transporting green hydrogen is up to five times the cost of a fossil fuel alternative. Hydrogen is also very difficult to transport across the ocean. This means there is no chance of big green hydrogen exports happening in the short to medium term.
These factors create risks for a potential green hydrogen industry that will make it difficult for green hydrogen projects to attract financing. Production facilities costing billions cannot be justified if transportation systems and end users aren’t ready and waiting.
It is also worth considering that, in many cases, solar or wind power are cheaper and more efficient than green hydrogen. For example, green hydrogen is an expensive and inefficient way to power cars compared to battery electric vehicles or to heat homes compared to electric heat using heat pumps.
A path forward
Our research suggests that the South African government should focus first on industries that will find it easy to switch from fossil fuels to green hydrogen.
For example, green hydrogen could be produced and converted to green ammonia in one place, without needing new pipelines. Green ammonia can be used to make farm fertilisers that are transported as solid pellets, and so no extra infrastructure is needed to move and sell bags of green fertiliser.
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However, the higher cost of green ammonia-based fertiliser would be a problem for local sales. Nitrogenous fertiliser is used on staple crops such as maize. Higher fertiliser costs would have a knock-on effect for food prices.
The transition to green hydrogen requires careful coordination across the entire supply chain. Rather than a “build it and they will come” approach, production, transportation and usage infrastructure must be built at the same time.
As countries race to meet climate targets, policymakers must discuss all the infrastructure a green hydrogen industry needs. Without coordinated development across the entire value chain, the transition to clean energy could be set back.
- is a Associate Professor in Mechanical and Mechatronic Engineering and Director of the Solar Thermal Energy Research Group, Stellenbosch University
- is a Senior Lecturer, Africa Energy Leadership Centre, University of the Witwatersrand
- This article first appeared in The Conversation
