Picture: REUTERS/MICHAEL DALDER
Picture: REUTERS/MICHAEL DALDER

Technology is today’s buzzword, with profound implications for humankind. The current hype over the fourth Industrial Revolution (4IR) is not a mirage but a serious breakthrough developing on SA’s horizon.

More significant is the news that the present era of competing technologies in capitalist economies is set to bring down manufacturing costs dramatically, with global implications. But in the past five years the world has seen a further two important technologies gain outstanding momentum: renewable energy and the electric car. The question is, how far behind is SA in its response?

The electric car has roots that go back to the early 20th century, possibly earlier. In the early 1900s both the internal combustion engine and the electric car were in a serious economic race. Ferdinand Porsche drove the first hybrid in 1906. However, without a suitable battery the electric car lost the technology race for about 100 years. Fast forward to Elon Musk and the lithium-ion battery and the latest mantra for Europe’s sales of electric cars: “100% by 2035”.

Today, the battery system itself has a competitive technology in the “green hydrogen” production from renewable energy via electrolysis of water. Hydrogen can generate electricity with fuel cell technology and is, in principle, an energy storage system in direct competition with the lithium ion batteries.

Renewables — also in gestation for many decades — have been the impetus for a response to global climate challenges. Over the past five decades research has focused on improving solar cell efficiencies to enable photovoltaics to gain traction, with scale-up reduction in the manufacturing costs of solar panels. In the past decade the introduction of photovoltaics together with wind turbines (renewables) has been dramatic, to the extent that renewables are now the front-runner for new power generation globally. Take the recent world record bid for a 25-year Saudi Arabian photovoltaic power purchase agreement (PPA) auction at $0.01 or 15 SA cents per kWh; this is below the fuel and water cost of local coal-fired power stations detailed in the Meridian Economics Report.

For SA the possibilities are endless given that the cap on unlicensed technology was recently raised by the government from 1MW to 100MW. This means municipalities and large industries can generate their own electricity and be more in control of their own destinies. Indeed, it is a whole new scenario that requires professional expertise beyond what we have now. Maybe it is the breakthrough in unemployment we have been looking for; how well it would alleviate the inevitable Eskom load-shedding.

Germany is already the front-runner in renewables. On one day last year statistics show it produced a record 74% of its daily electrical energy requirements from renewables. However, a few years ago, when the global electrical energy production from renewables was typically 20%, the naysayers were predicting a grid constraint upper limit of only 30% penetration due to the intermittency challenge of national grids. Suitable microgrid design is now sufficiently mature to enable incorporation into any given grid configuration.

Germany has been a front-runner in both renewables and electrolysers, as well as fuel cell technology, probably due to Angela Merkel’s leadership. Her PhD background in physical chemistry has certainly stood her in good stead for understanding the stimuli to the economy offered by technology-based innovation. 

In 2017, the mantra “50 by 50” (Bloomberg NEF) was then given as the expected renewables penetration by 2050. Today this is illustrated by the new mantra “100 by 50” due to the dramatic penetration from the falling costs of renewables. Major countries such as the UK (under prime minister Teresa May) set zero CO² emissions as law by 2050, though China is the exception, targeting 2060.

SA investment opportunities are now possible with the introduction of renewables, since associated technologies exist for any zero emissions target. First, the intermittent nature of renewables necessitates storage in one form or another. Battery storage of the electricity is obviously one answer. A second approach that is in its early but rapidly growing development is green hydrogen, produced by electrolysis of water using renewable electricity.

Recent research from Wood Mackenzie indicates that the global project pipeline has grown from 3.5GW to just over 15GW in 10 months. The confidence to invest such capital in electrolyser technology would suggest  risk is minimal and market entry reasonably mature.

Secondly, in terms of electricity production, green hydrogen requires the introduction of fuel cells. There has been a dramatic decrease of the cost of green, hydrogen-based electrolysers when coupled with fuel cell technology. Wood Mackenzie predicts a further 64% decrease in green hydrogen costs by 2042. This is set to provide a direct competitor to the lithium-ion battery.

SA has already announced a major initiative in the electrolyser/fuel cell technology area. It is now to be known by the rather romanticised but hopeful term “Hydrogen Valley”. We could therefore be poised for a revival in our mining sector as the driver is platinum in both technologies — and SA is still the dominant global platinum resource. This initiative could certainly compensate for the loss of the major car exhaust catalyst market by the electric car.

Another associated news item is that ZeroAvia, British/American hydrogen-electric aircraft developer, has already flown the first green hydrogen/fuel cell six-seater aircraft. While the use of hydrogen technology in air transport may remain somewhat haunted by the 1937 Hindenburg airship disaster, the CEO of ZeroAvia has predicted a 100-seater transatlantic aircraft by 2030. And if this is anything to go by, Amazon invested in this business venture in June 2021.

Global shipping is likely to be the next to experience the penetration of green hydrogen/fuel cell technology. Safety in civilian transport is, however, likely to remain a considerable challenge due to the current danger of rupturing on-board storage tanks during road accidents (again the spectre of Hindenburg).

What is now certain is that new photovoltaic (solar energy) costs are also below the fuel and water cost of fossil fuel-based electricity. This has recently been confirmed in the North American environment by the Saskatchewan Research Council of Canada (SRC). The target of 2050 is coming under increased pressure to be successful from the climate change driver — scientists claim that the original target of 1.5°C has already occurred, and predicting an end-of-century expected increase of 3.3°C with possible irreversible negative consequences.

Of course, it is not news to the SA government that our coal-fired power stations need to shut down to decarbonise. King coal is no longer an investment option, but what happens next at Eskom is make or break. Germany’s revelation has been to decarbonise early and fund stranded coal assets with state assistance. The speculation here is that, for Germany, the cost of renewables is also below the fuel and water cost of coal-fired power stations, thereby enabling it to follow this decarbonising model.

What model will our politicians choose for a “just transition”? Does Eskom take on renewable technology and compete with IPP producers, like the US utilities model? Nuclear energy is attempting to reinvent itself using the small modular reactor (SMR) model, thereby lowering capital costs and installation time. The old challenge of cost and time.

What is possible for small modular reactors is that it is a competitive technology that must be developed simultaneously with the lithium-ion battery and electrolyser/fuel cell options. This is to drive down the necessary storage cost of renewable technology and overcome its concomitant intermittency problem. 

It will take some time before this is certain, but our politicians need to know the difference between fact and fiction before more time and money is wasted.

• Dr Wood, a former cost engineer with Mintek, silicon metal development manager at Samancor and business group member with ICI Corporate Lab in the UK, is a panellist for Econoquest. He writes in his personal capacity.

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