Gauteng government at the vanguard of SA’s green economy plans

The 26th UN Climate Change Conference (COP26), which took place earlier this month, was undoubtedly a watershed moment for humanity and nature. 

It represented a tipping point in a climate catastrophe that has a direct negative impact on national economies and employment prospects.

As such, the $8.5bn finance package negotiated by SA with the developed countries at COP26 is an example of solidarity in action. 

The commitments made as part of the 2016 Paris Agreement, an international treaty on climate change, are provoking a fundamental change in how countries, at all levels of development, source and use energy. 

The exploration of, and commitment to, the use of chemical storage of green energy to decarbonise entire grids and industries is a major emergent frontier of global energy markets. Green hydrogen powerfuels, whether combusted directly or used in fuel cells, are now central to national decarbonisation strategies across the globe.

SA has identified green hydrogen as an unlimited industrialisation opportunity with a sizeable potential for economic development, particularly for the Northern Cape and Gauteng provinces. 

There are broadly three commercialisation lanes for SA to drive the industrialisation of green hydrogen. These are:

1. Decarbonising local industry and segments of the local electrical grid using green hydrogen as a power source;
2. Supplying green hydrogen for the mobility of heavy vehicles such as buses and trucks; and 
3. Producing large volumes of green hydrogen powerfuels for export. 

Guided by Paris Agreement and the department of mineral resources & energy’s 2019 Integrated Resource Plan, the Gauteng provincial government is adopting the following strategies to take a practical leadership position on domestic demand for green hydrogen.

These strategies will be anchored by its partnership with Sasol and various investments that are being driven through its multi-tier special economic zones (SEZ) network. 

First, a large-scale embedded generation (LSEG) plan will unlock the deployment of LSEG industrial grids using green hydrogen for specific industrial sites.

These will serve industries with large-scale facilities, such as steel producers needing green power to be export competitive in coming years, or areas with unreliable power supply in need of reliable micro-grids or industrial growth, particularly in Ekurhuleni and Emfuleni. 

These new hydrogen-powered grids can be rapidly scaled using the new 100MW self-generation cap dispensation recently announced by President Cyril Ramaphosa. The Gauteng provincial government’s partnership with Sasol and Mitochondria Energy, both incoming investors into its Vaal SEZ, will directly support this.

By using cheap green energy as a national advantage, the government can attract investors to relocate all manner of industrial production to SA — starting in Gauteng. 

Second, the Gauteng provincial government will need to explore ways to initiate green hydrogen as an energy source for mobility opportunities focused on publicly owned and publicly subsidised bus fleets.

This will be accomplished by leveraging the bus subsidy  and working with municipalities on phasing green hydrogen cell power into bus rapid transit (BRT) fleets.

The provincial government’s partnership with Busmark, one of a cluster of investors in its N12 Corridor SEZ in the West Rand, directly supports this, as does the investment by Isondo Minerals, a fuel cell manufacturer, in its OR Tambo SEZ. 

Third, a dedicated green hydrogen skills academy will need to be established to focus on the new competencies demanded by this fast-evolving sector with respect to production, value chain management and maintenance. This will potentially be embedded as a feature of the province’s expanding SEZ network. 

Lastly, the provincial government is embedding strategic localisation, enterprise and supplier development initiatives with respect to the manufacturing of components, installation and servicing of renewable energy systems. 

This is being done to facilitate a cohort of black industrialists and energy companies in providing and running the LSEG capabilities for industry. Both are critical because 70%-80% of the jobs created will be in the installation and maintenance part of the value chain, while a large percentage of the monetary benefit will go to the renewable energy manufacturers. 

Engendering climate-resilient economies by investing in green hydrogen powerfuels is essential for humanity and nature. It will guarantee a shared future for all.  

This article was paid for by the Gauteng department of economic development.