Overview
The Green Hydrogen Project in Namibia is a multi-billion-dollar initiative to develop the country’s vast renewable energy resources and become a major exporter of green hydrogen and its derivatives, such as green ammonia. Owing to its abundance of solar and wind resources, Namibia is aiming to become a green hydrogen superpower in the coming decade by positioning itself as a leader in the emerging markets and an international exporter of green hydrogen.
Green hydrogen will be an important source of foreign investment and is important for the country’s energy security and transition. The government plans to use it, extensively to decarbonize its own economy. Below is the low-down on everything you need to know about the project and its impact on Namibia going forward.
Green Hydrogen Project Details
Location: The pilot of the project will be based at Tsau //Khaeb National Park, near the coastal town of Luderitz, Namibia
Investment: The project is planned to have a cost of US$9.4 billion and Namibia has already engaged its first investor, awarding Hyphen Energy preferred bidder status for US$4.4 billion.
Capacity and price: The new Namibian green hydrogen strategy targets a production of 10-12 million tonnes per annum hydrogen equivalent by the year 2050. Through the pilot project of HYPHEN Tsau Khaeb, Namibia has set a Hydrogen production target of 300,000 tonnes per year
The electrolyser capacity target for the Hyphen Tsau Khaeb project is 3 GW (gigawatt). McKinsey estimates that Namibia could be producing green hydrogen at US$1.5/kg by the year 2030. Seven (7) GW of wind and solar power generation, three (3) GW electrolyzer production of 2 million tons of green ammonia annually.
Project Timeline
The project is set to start production in 2026 and the rights to the project has been granted to Hyphen for a 40-year period. The cost of green hydrogen produced in Namibia will be between $1.73- $2.30 per kg, with exports foreseen to start before 2025.
Partners
The main players in the project is the Government of Namibia in collaboration with Hyphen Hydrogen Energy (a joint venture between German renewables developer Enertrag and international investment firm Nicholas Holdings).
Economic Impact of the Green Hydrogen Project
There will be various economic benefits of the project and chief among them is the estimated creation of 15 000 direct jobs during the first four years of construction and further 3 000 permanent jobs with 90% of those being employed being Namibian locals. These jobs will be in all 3 sectors i.e. downstream, upstream, and midstream. Further benefits include:
- Diversify the Namibian economy;
- The generation of significant revenue for the government;
- Attracting foreign direct investment;
- Advance the development of green hydrogen production and export technologies; and
- Position Namibia as a leader in the green hydrogen economy
Environmental Impact
The project is estimated to have a positive impact on Namibia’s net contribution to climate change. This includes:
- Reduce greenhouse gas emissions
- Promote the development of renewable energy
- Contribute to the global transition to a clean energy future
Current Status
The project is in the feasibility stage. A Feasibility and Implementation Agreement (FIA) has been signed between the government and Hyphen Hydrogen Energy. Environmental and social impact assessments are ongoing. Construction is expected to begin in 2024, with first production of green ammonia in 2026.
Challenges
The project is, however, not without its challenges including but not limited to:
- High initial investment costs
- Lack of infrastructure
- Environmental concerns
- Global competition
Despite the challenges, the Green Hydrogen Project has the potential to be a transformative project for Namibia and the global energy sector. Its success could pave the way for other countries to develop their own green hydrogen industries and contribute to a more sustainable future.
This article does not constitute legal and/or financial advice. Kindly consult a registered financial or legal professional for appropriate advice on the subject matter.
