Namibia has the ingredients to become a renewable energy powerhouse, according to Marco Raffinetti, chief executive of Hyphen Hydrogen Energy, the company selected in November 2021 as the preferred bidder for Namibia’s first hydrogen project. “It has excellent co-located wind and solar resources, large swathes of uninhabited, government-owned land – and the industry has strong support from the government,” he told was quoted saying.
Hyphen – a joint venture between German renewable energy company Enertag and investment and project development company Nicholas Holdings – is working with the government on an implementation agreement that will trigger the start of a feasibility study for the project. The company plans to start production of the first 125,000 tonnes (t) of green hydrogen by the end of 2026. By 2030, it plans to be producing 300,000t of green hydrogen per annum using 5–6GW of renewable generation capacity and 3GW of electrolyser capacity.
For Namibia this would just be the start. Hyphen is one of ten projects the government hopes to develop in the 26,000km2 of land it has earmarked for hydrogen development in the Tsau/Khaeb National Park near the coastal town of Luderitz, now referred to as the Southern Corridor Development Initiative (SCDI). A former diamond mine, the area has been closed off to the public for more than a century and is one of the most biodiverse regions in Namibia. The SCDI is just one of several regions the government says could support large-scale hydrogen production.
Starting with ammonia
Namibia’s hydrogen export plans need to overcome the challenge that shipping hydrogen has not been done on a commercial scale. Liquifying hydrogen is expensive and inefficient. It needs to be cooled to -253°C, which requires high volumes of energy.
This is just one part of where energy is required – and lost – across the hydrogen value chain. “Take 20% off for electrolysis [the process of using electricity to split water into hydrogen and oxygen], 33% off for liquefaction, 10% for efficiency losses for long-haul cooling and handling, and 40% off for conversion back into electricity, and the solar energy in Namibia turns into perhaps 29% of the energy being useful,” clean energy expert Michael Barnard, chief strategist at consultancy The Future is Electric, wrote in an article for CleanTechnica in December 2021. The result is, he calculates, that liquefied hydrogen would be at least five times as expensive to ship as LNG per unit of energy.
One pilot project in Australia shipped liquid hydrogen to Japan, but the volume of hydrogen shipped was small, at only 2.6t. The ship also made headlines for catching fire before it set sail.
The complications with shipping hydrogen mean that Hyphen’s project, while intended to be the catalyst for a hydrogen export industry in Namibia, is actually going to be exporting ammonia, a hydrogen derivative.
Namibia currently imports around 60–70% of its electricity through the regional electricity network, the Southern African Power Pool (SAPP). Hyphen says its project, which would increase Namibia’s electricity production capacity by around 5,000MW, up from 680MW today, could improve the country’s energy access.
When fully optimised for hydrogen production, Hyphen’s project will generate 1.5–2 terawatt-hours of electricity per annum that is surplus to the project’s requirements, roughly equivalent to Namibia’s electricity purchases from the SAPP, according to Raffinetti. “The potential exists to incorporate into the design of the Hyphen project the supply of electricity, either on a self-dispatch basis or to meet a required dispatch profile, to assist Namibia in meeting its demand requirements,” he says.
As other hydrogen projects are developed, this excess electricity could also be made available to the SAPP, helping to decarbonise the region’s electricity supply, he adds.
As well as increasing the availability of power, Namibia hopes green hydrogen development will reduce its cost. Namibia pays between $0.09 and 0.12 per kilowatt-hour (kWh) for imports through the SAPP, but these costs could drop to $0.02–0.03/KWh as it ramps up domestic hydrogen production, James Mnyupe, the government’s green hydrogen commissioner told the World Hydrogen Summit in Rotterdam, the Netherlands, in May 2022.
Cheap, clean electricity could also incentivise energy-intensive industries looking to decarbonise into Namibia, such as zinc and aluminium smelting, he said.
The Hyphen project will use desalinated water for its plant, a process that Raffinetti says will only add a couple of cents per kilogram to the final delivery price of Namibia’s hydrogen.
The water requirement is “pretty small”, he says, with 1kg of hydrogen only requiring around 9kg of water.
However, the issue with hydrogen production is not water use, it is energy use, says Martin. “Pure water electrolysis requires about 50–65kWh of electricity per kilogram of hydrogen produced,” he explains. “Producing enough freshwater by desalination of seawater to make 1kg of hydrogen takes about 0.035kWh by reverse osmosis.”
The electricity that goes into the production of just 1kg of electrolytic hydrogen could instead make around 14,000 litres of pure water for Namibians to use, he says.
A big opportunity – a big risk
The green hydrogen industry is in its infancy, and it is difficult to predict how the market will develop in the long term. Depending on global climate ambitions, sector-specific activities, energy efficiency measures, direct electrification and the use of carbon capture technologies, hydrogen demand by 2050 could vary from 150 to 500 million metric tonnes per year, according to a report by the World Energy Council and PwC.
Hydrogen is an expensive bet for Namibia. Hyphen estimates its project will cost around $10bn (N$159.9bn) – roughly the equivalent of Namibia’s annual GDP. The Namibian government could take up to a 24% stake in this, raising up to $500m for its own equity, Mnyupe told Bloomberg at the World Economic Forum in Davos, Switzerland, in May 2022.
The Hyphen project has already attracted the interest of some lenders, particularly development finance institutions. “There is strong appetite to see projects of this nature succeed on the African continent, and in Namibia specifically,” says Raffinetti.