Saldanha Bay as a hydrogen hub

How is Saldanha Bay strategically positioned to become a hydrogen hub?

The first and second industrial revolutions significantly propelled human civilisation from an agrarian and handicraft economy to one dominated by industry and machine manufacturing. The outcomes were exponential economic and social development which fundamentally transformed how society lives and works. Driving the transformation hinged on the integration between three factors: 1) developments in new forms of communication technology, 2) new sources of energy, and 3) new modes of mobility or transportation logistics.1

The discovery and utilisation of fossil fuels such as coal and petrochemicals drove societal advancement throughout the 20th Century. The environmental consequences of sustained production of atmospheric altering chemicals were disregarded for the economic and societal benefits of holistic growth. Today, fossil fuels are becoming harder to cost-effectively extract. The effects of fossil fuel-based climate change are being felt across the globe, and new renewable energy technologies are proving more efficient than their carbon-intensive counterparts.

On the 12th December 2015, 195 counties (including South Africa) signed the Paris Agreement, which seeks to limit the global increase in temperatures to less than 2oC by 2050. To achieve this ambitious target, significant reductions in emissions are required, and a paradigm shift in how we source and utilise energy is needed.2

Why hydrogen? One of the most significant challenges facing large scale adoption of renewable energy boils down to one problem: How can we efficiently store and transport clean energy? Hydrogen provides an answer to both providing incomparable quantities of energy as well as being relatively easy to store and transport (i.e. the technology to store and transport hydrogen exists today and is no more complex than processing liquified natural gas). Furthermore, hydrogen can be produced in collaboration with renewable energy almost anywhere globally. It uses one of the planet’s most abundant resources (water), and it has the potential to produce zero carbon emissions. By many accounts, hydrogen will be the energy source that drives humanity into the third industrial revolution.

The ultimate ambition is to produce hydrogen through solely renewable energy electrolysis, known as green hydrogen. However, it is not the only method. Grey hydrogen utilises fossil fuels, and blue hydrogen is also fossil fuel-based but integrates carbon capture and storage into the process to reduce the amount of carbon emissions. The goal of reducing carbon emissions creates a unique opportunity for African nations to benefit. Fundamentally, Africa is positioned to become the preferred location for green hydrogen exports due to the expansion of renewable energy infrastructure, greater land availability, and easy access to water sources and port facilities.3

Strategically, the Western Cape is aligned with the increased adoption of renewable energy resources to restrict the negative impact of climate change and improve the competitive advantage of industry against export markets.4 In support of this strategic objective, MEC David Maynier launched (August 2021) an Energy Resilience Fund to the value of ZAR13 million to qualifying municipalities for research and planning to determine the requirement and potential costs of the renewable energy projects that the government will be developing to build energy security and buffer households and businesses from load shedding in the Western Cape.5

Similarly, Boston Consulting Group conducted a green hydrogen market analysis identifying Saldanha Bay as one of three critical locations for substantial hydrogen export.6 The factors which competitively place Saldanha Bay apart from other coastal regions are the presence of the natural deep-water port, sufficient land and synergies in solving for water security, and close geographic proximity to large scale renewable energy sources such as photovoltaic solar and wind.

There are still challenges, but together we can find a way. The three-year rainfall deficit between 2015 and 2017 lead to the worst water crisis ever experienced by the Cape Town metropolitan area. “Day Zero” pushed scientists to more effectively predict and forecast climate change within the Southern tip of South Africa. A research study conducted by the Journal of Earth, Atmospheric, and Planetary Sciences (2020) confirmed that there is an increased probability of a rainfall deficit within the region, thus a strong sensitivity to drought risk in the future. 7 Freshwater is one of the reactants required to produce hydrogen, the increased demand for freshwater could significantly increase the severity of water stress within the Western Cape region. Often, “crises present us with unique conditions that allow innovators to think and move more freely to create rapid, impactful change.” An outcome of “Day Zero” was the construction of supplementary and larger desalination plants across the Western Cape. Adjacently, technological developments have effectively produced hydrogen from seawater, which could lead to large-scale hydrogen production and desalination.8 Here we see that the incremental development of adjacent technologies can holistically improve the water resilience and energy security of the Western Cape.

Overall, the hydrogen industry has the potential to strengthen the relationship between South African industry and the global market. As a result, this could lead to more investment opportunities from supporting nations – similar to the US$8.5 billion deal that was announced at COP26.9 Furthermore, estimations based on low to high hydrogen demand cases forecast that the hydrogen industry could lead to the development of approximately 14 000 – 30 000 jobs per year.

Hydrogen is an opportunity for Saldanha Bay to become a critical agent in catalysing the movement towards decarbonisation.

For more granular information on How Saldanha Bay Is Positioned to Become a Hydrogen Hub, follow the link to one of our panel discussions – where the focus was: 

  • Exploring the role of hydrogen in the energy transition,
  • Identifying areas where South Africa is leading in RD&I hydrogen development, and
  • Understanding the type of RD&I needed to scale production



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Energy Transition Programme 2023

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