By:Justicia Shipena
Sub-Saharan Africa has tremendous opportunities for green hydrogen development, with Namibia’s sector expected to flourish, the African Energy Chamber (AEC) has said.
The AEC just published its first-quarter 2023 State of African Energy Outlook report.
The report examines the growing dynamics influencing the global oil economy and emphasises Africa’s role in meeting global demand.
According to the AEC, the continent’s potential extends beyond its northern borders.
“However, with Sub-Saharan Africa hosting numerous prospects for green hydrogen developments. Namibia’s green hydrogen sector is poised for growth following recent export agreements with Germany and South Korea,” it said.
In 2021, Germany reached an agreement with Namibia to provide assistance and €40 million (N$807 million) to develop green hydrogen production in exchange for a future affordable supply of the gas.
In March of this year, it was announced that €30 million (N$605 million) was set aside in the same contract for bilateral domestic green hydrogen pilot projects based on research.
Meanwhile, Hyphen Hydrogen Energy, which is constructing Namibia’s green hydrogen project, inked memorandums of understanding in February this year with South Korean hydrogen producer Approtium and another large chemical business for its 1 million mt/year green ammonia plant in development in Namibia.
When it comes to Africa’s global position in terms of upstream emissions, the report states that from 2023 through the end of the decade, Africa’s upstream emissions are expected to total 795 million tonnes of carbon dioxide (CO2) equivalent.
According to the AEC, Africa is expected to rank fifth internationally in terms of total emissions over the period, trailing North America, the Middle East, Asia, and Russia.
As a result, it is anticipated that Africa’s upstream emissions will account for 9.5% of worldwide upstream emissions from 2023 to 2030, with gas flaring accounting for over half of the total.
“While the upstream extraction related emissions from Africa are a mere 7% of the global extraction emissions, the flaring and venting emissions from Af- rica over the period are estimated to be almost a fifth of the global levels,” it said.
According to the Chamber, flaring accounts for the bulk of upstream emissions in Africa and is also one of the world’s main flaring locations.
The AEC stated that Africa’s estimated oil and gas resource potential and production forecast for the future clearly indicates that there is significant undeveloped potential, and output is completely dependent on these undeveloped volumes as the producing reservoirs are now in terminal decline.
At a conservative level, the report said Africa has approximately 74.365 billion barrels (Bb- bls) of recoverable liquids and 82.875 billion barrels of oil equivalent (Bboe) of recoverable natural gas resources.
However, only half of the liquids potential and one-third of the natural gas potential have been developed and are actively producing.
“45% of the liquids and a much larger 60% of the natural gas potential is currently ‘stranded’ in pre-FEED [Front End Engineering Design] state.”
Meanwhile, the report also revealed that natural gas production can increase if these stranded volumes are developed without further delays than currently anticipated, liquids flows require accelerated development and more discovered volumes to increase, and current volumes and timelines are expected to only stabilise the decline and maintain a flat production trend.
According to the analysis, maintaining a stable oil output and satisfying domestic and international natural gas supply goals will necessitate an anticipated greenfield investment of close to US$65 billion (N$1.2 billion) from 2023 to 2025.
This is expected to rise to almost US$225 billion N$4,142 billion) for the rest of this decade, and more than US$485 billion (N$8,929 billion for the next decade (2031-2040).
However, according to the African Energy Chamber, the present estimated economic viability or “commerciality” of this spending paints a different image.
“2031 to 2040 greenfield spending can be expected to be diminished to about US$55 billion (N$1,013 billion). This can mean a potential deathblow to Africa’s oil and gas aspirations, economical future of a number of fossil-fuel exports
dependent economies in the continent and, energy security and universal elec- tricity access being aimed to achieve using natural gas as a transition fuel,” it explained.
On the other hand, because Africa is now heavily reliant on fossil fuels for electricity generation, it is anticipated that 75% of the power generated in Africa between 2022 and 2023 will be generated using oil, gas, and coal.
“A cumulative 60% of the power generated in 2030 is expected to be from fossil fuels with oil and gas generating about 40%,” the EAC projects.
Furthermore, according to the report’s 2040 prediction, close to 37% of the power generated will be created using oil, gas, and coal, with coal still accounting for 9% and natural gas accounting for more than a quarter of the power output.
As a result, fossil fuels are projected to have a long-term role in electricity generation in Africa.
“25% of the power generated in 2030 and 5% in 2045 is estimated to be from oil and gas. As such, oil and gas is expected to play a long-lasting role in Africa’s power mix.”
African Energy Chambers Projects Flourishing Green Hydrogen Sector For Nam
