Hydrogen and renewable energy, Namibia discovers how lush a desert is
“Now suddenly the desert has become precious.” Finance Minister Ipumbu Shimi’s statement sums up the international interest in Namibia. The constant presence of the sun and the strong wind allowed it to draw attention to the great potential of renewable energy that it is capable of producing. More than any other, this green hydrogen that everyone needs and is desperate to achieve in order to meet the environmental objectives of the next decades.
With an average of 300 days of sunshine per year, Namibia is indeed the second country in the world for solar radiation. Moreover, the name of the capital is quite a scripture: Windhoek literally means “angle of the wind”, which could soon move towards the center of the world given the influx of investments it receives.
Among the first to set eyes on Namibia, Germany, familiar with the territory due to its colonial past (the country left the grip of the German Empire in 1919, after thirty-five years of subordination) . “There is already a global race for the best hydrogen technologies and the best locations for [sua] production. From our point of view, Namibia has particularly good chances in this competition”, declared at the end of August the Minister of Research at the time, the German Anja Karliczek, during the signing of a partnership with the African country for green hydrogen. . A collaboration that has seen Berlin invest around 40 million euros for pilot projects and feasibility studies, as well as to strengthen the training of experts and specialists in the sector. For the former German minister – who handed over the baton on December 8 to Bettina Stark-Watzinger, of the Liberal Democratic Party, who entered the new Scholz government -, the price of a kilo of hydrogen “made in Namibia” would be established between 1.50 euros and 2 euros. A very practical value which represents a great opportunity for Germany, since “we need large quantities quickly and at cheap prices per kilo”.
What is missing, however, is not hydrogen per se. Currently, almost all of it is gray (96%) because it comes from fossil fuels. Immediately after there is the blue, less polluting than the first because it derives from the CO2 present in the air. Finally, green, the most important and necessary to give substance to the ecological transition but also the most difficult to find. It is in fact obtained from water and electricity and costs four to five times more than grey. Germany’s belief – or hope – is that Namibia, thanks to the characteristics of its territory and the liquidity introduced by Berlin, can become a low-cost hydrogen hub from which it can be refueled to achieve the status of “carbon free” within 2050. To succeed, however, the African country needs to be accompanied on this path.
“Recognizing the inevitability of the energy transition, we understand and accept that fossil fuels are no longer the fuel of the future and that the world is turning to renewables,” said Minister of Mines and Energy, Tom Alweedo, speaking at the Renewable Energy Affair held in Dubai at the end of November. An eloquent demonstration of this is the National Integrated Resource Plan (NIRP), born in 2013, revised three years later and which should receive its official form by 2022. With this long-term project, the country aims to meet the demand in energy resources. By 2030, it has been predicted that 70% of Namibia’s energy will come from renewables, while 80% of that used will be produced internally. “However,” stressed the former Governor of the Bank of Namibia, “we also call for a just and equitable energy transition between nations. We must guard against an energy transition process that has the potential to negatively affect some without no mitigation.” Namibia knows its potential and, unsurprisingly, the ecological transition plays an important role in the post-Covid economic recovery plan promoted by President Hage Geingob. It is precisely for this reason that his government has been invited to present it at the World Economic Forum in Davos, scheduled for January but postponed due to the spread of Omicron.
However, this may not be enough. The government alone is not able to achieve the required standards and for this reason it has relied on local and foreign, public and private investors. Windhoek therefore launched an international proposal to understand which and how many investors were interested in the project. In the end, the project was awarded to Hyphen Hydrogen Energy, for a total value of 9.4 billion dollars, and should lead to the production of pure or derived green hydrogen (ammonia) equal to 300,000 tonnes per year. . This is the first project of its kind and the site has been identified in Tsau/Khaeb National Park, in the Namib Desert in the southwest of the country, among the top five locations in the world for hydrogen production at low cost. The announcement came directly from President Geingob at the international climate summit held in Glasgow in early November. Once the project has been finally approved, Hyphen, a joint venture between the British Nicholas Holding and the German Enertrag, will have the opportunity to manage it for the next forty years and create around 20,000 jobs, 90% of which are occupied by Namibians. From there, the hydrogen will be produced to be redistributed internally and exported.
However, sorting it out worldwide will not be an easy task. As the Wall Street Journal reports, exporting the finished product via ships would require modernization of the port of Lüderitz because it is located in shallow water. Being a nation that tends to be very arid, in order to produce green hydrogen it will be necessary to desalinate seawater through expensive new facilities. For Berlin, this should not be a problem because, in the end, the cost of developing the port would be around 1%. But from there, broader horizons could open up, with other protagonists ready to enter the scene.
Among these, of course, China is so hungry for natural resources that it has already set foot in Africa. In Namibia, the other port of Walbis Bay – the only one already in very deep water since it was built on 40 hectares of land reclaimed from the sea thanks to reclamation – was rebuilt in five years by China Harbor Engineering Company (CHEC) . Compared to the usual mode of operation on the part of Beijing, the modality had been slightly different. On this occasion, in fact, 73% of the 268 million dollars were allocated by the African Development Bank, while the remaining 27% by the Namibian government. The Chinese, on the other hand, have been given the role of entrepreneurs but that does not mean that the influence of the Dragon should be less. Indeed, with the hydrogen issue in motion, Beijing’s eyes have turned even more to the shores of Namibia, which entered orbit from the Silk Road a few years ago. The municipality of Lüderitz has already estimated that the city will increase its population by about ten times thanks to the planned investments, which will necessarily include new housing and the expansion of essential services, from water to sewage.
The question is all the more important as Namibia seems to have overtaken neighboring South Africa in the production of renewable energy. Beijing had already taken an interest in the quantity of rare earths and the operation of the port of Walbis Bay was aimed precisely at consolidating its presence in the area. When President Geingob announced his project at COP26 in Glasgow, his South African counterpart Cyril Ramphosa was looking for a way to increase green hydrogen production efforts in the Boegoebaai special area. For Ramaphosa, huge benefits could arise from the collaboration of the two neighboring countries for the development of green resources. This may also be the reason why the South African petrochemical and energy company, the sasol, knocked on the doors of the Windhoek government to test the waters and see what leeway it had for possible joint projects. If on the one hand the silence of the company on the advanced offers does not allow to better know the state of the art, it is certain that this “corner” of Africa conquers more and more the center of the World Scene.