Namibia Unveils Green Hydrogen Strategy

Namibia’s Green Hydrogen Strategy was unveiled to the world during the 2022 United Nations Climate Change Conference or Conference of the Parties of the UNFCCC, commonly referred to as COP27, held in Sharm El Sheikh, Egypt.

In the strategy, Namibia sets out how it intends to capitalise on the global hydrogen market potential, leveraging on its world-class renewable energy sources which enables it to produce hydrogen at a low cost.

Namibia reveals that it will focus mainly on the export of hydrogen derivatives including ammonia, methanol, synthetic kerosene and hot-briquetted iron. Three hydrogen valleys will form a green fuel ecosystem, while green fuels will catalyse deeper regional value chains and cooperation in Southern Africa.

Namibia believes that its nascent green hydrogen industry will boost the country’s gross domestic product (GDP) and quality of employment, accelerate the goals set out in the Harambee Prosperity Plan to deliver broad-based prosperity to citizens, enable green growth goals and ultimately boost economic development.

A skills development strategy will create sufficient talent, while fit-for-purpose regulatory and institutional framework will be put in place. A modern delivery support system will help investors and project developers navigate Namibia’s hydrogen landscape.

According to the GH2 Strategy, a shared infrastructure will enable integration of hydrogen clusters and lower costs, while Namibia will seek to forge relationships with international partners dedicated to building the hydrogen economy, through strategic diplomacy.

In his foreword, President Hage Geingob says the Green Hydrogen Strategy complements the 2nd Harambee Prosperity Plan’s economic advancement pillar which aims at the development of complementary engines of growth.

“Additionally, building a thriving hydrogen industry in Namibia has the potential to make a major contribution to solving the global climate crisis while also building broad-based prosperity for our citizens. Scientists from the international panel on climate change, the International Energy Association (IEA) and the International Renewable Energy Agency (IRENA) have produced a plethora of research that contains the same conclusion – there is an urgent need to accelerate our efforts to decarbonise our energy systems. Namibia plans to respond accordingly,” Geingob says.

“We therefore invite like-minded partners, public and private, to join us as we embark on an exciting and transformative journey to re-shape the global energy and industrial landscapes into a more sustainable home for all mankind.”

It is believed that green hydrogen will play a crucial role in the global decarbonisation effort because of its versatility and unique ability to connect power, gas, chemicals and fuel markets, especially in hard-to-abate sectors.

Under a net-zero by 2050 scenario, global demand for hydrogen and its derivatives is expected to soar from an estimated 140 metric tonnes per annum (mtpa) of hydrogen equivalent in 2030 to 660 mtpa in 2050.

With its world-class renewable energy sources, Namibia is poised to help fill the anticipated global hydrogen demand-supply gap and lower the cost of the net-zero transition. Many countries will not be able to meet their demand fully or cost-effectively through domestic production; instead, they will rely on energy partnerships with countries like Namibia that have more abundant renewable resources to close supply gaps and lower costs.

Namibia is also well placed to serve markets in Europe, China, Japan and South Korea and other parts of the world and aspires to create an at-scale green fuels industry with a production target of 10-12 mtpa hydrogen equivalent by 2050. To this end, three hydrogen valleys will be developed in the southern region of Kharas, the central region which includes the Walvis Bay port and the capital Windhoek, and the northern region of Kunene.

It is envisaged that by 2030, the hydrogen industry could contribute up to US$6 billion (N$102 billion) to GDP, 30% more than 2030 GDP estimates with no hydrogen industry development. This would boost labour demand by generating up to 80,000 additional jobs by 2030, and up to 600,000 by 2040.

Local content manufacturing, in renewable energy components and sustainable biomass harvesting, will further enhance economic development, while a  comprehensive skills development strategy based on domestic talent sourcing and attractive immigration policies will ensure sufficient labour supply.

A shared infrastructure backbone established as part of the country’s first large- scale green hydrogen project (Hyphen Hydrogen Energy) will enable integration of several hydrogen clusters and lower costs.

Recognising that the cost of capital is a key determinant of hydrogen and derivatives production costs, Namibia is setting up a facility to mobilise concessionary climate finance to de-risk investments and lower the cost of capital for hydrogen projects.

As a global leader in conservation and nature- based ruraldevelopment, Namibia will set the bar on environmental and community-responsible development in the hydrogen economy. As the country develops its vast but finite and delicate renewable resources, it will explore transparentauctions, joint ventures and/or government-to-governmentagreements with the speed needed to support energysecurity, combat climate change and maximise the opportunity to create sustainable wealth for the people of Namibia.

Green hydrogen generated from renewable energy will become more and more cost-competitive as electrolyser and renewable costs decrease. From 2040, green hydrogen is expected to dominate the global supply, rising from about 20% of the total hydrogen mix in 2030 to about 70% by 2050.

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