By Lehlohonolo Lehana.
The United Kingdom (UK) government plans to support South Africa’s plans to develop a green hydrogen sector with grant-funded technical assistance.
The announcement was issued on Tuesday morning as President Cyril Ramaphosa embarked on a state visit to the UK this week.
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.
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.
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.
In a statement, UK Prime Minister Rishi Sunak also shared that the two countries will continue to work together on their infrastructure partnership.
“… We have ambitious plans to turbocharge infrastructure investment and economic growth together,” said Sunak.
“I look forward to welcoming President Ramaphosa to London this week to discuss how we can deepen the partnership between our two great nations and capitalise on shared opportunities, from trade and tourism and security and defence,” he added.
The UK and South Africa entered into a Memorandum of Understanding earlier this year – allowing the UK to share technical knowledge, advice, skills and expertise with South Africa to address capacity gaps in preparing infrastructure projects to attract finance on the market.