Production costs for renewable hydrogen in Africa could hover around $2/kg by 2030, according to the IEA.
The IEA expects that hydrogen produced from renewable energy in southern Africa could cost just under $2/kg by then, while equivalent output in northern Africa may be just above that threshold. Hydrogen produced in northern Africa from natural gas with carbon capture and storage could still be cheaper by 2030, holding at just over $1/kg, according to the IEA. That said, in specific regions hydrogen production from renewables could also cost less than $1.5/kg. In the south, regions with potential for production at a particularly low cost include parts of South Africa, Namibia and Botswana, while in the north it could be achieved in parts of Egypt, Libya, Sudan and Chad, among others.
Renewable hydrogen production at around $2/kg or even lower would mark a large drop from prevailing costs. Argus calculates prevailing costs for hydrogen produced in Namibia with a 100MW polymer electrolyte membrane (PEM) electrolyser and with integrated wind and solar power at $7.35/kg, including capital expenditure.
Substantial cost decreases in renewable hydrogen production will require "strong policy support and timely investment in infrastructure", the IEA said.
This will also be a need to encourage domestic consumption of low-carbon hydrogen, the organisation said. Domestic demand "will be harder to stimulate in Africa than in other parts of the world due to the significant capital requirements to build production capacities", it said. "Tilting the balance in favour of hydrogen would require increased excise duties on fossil fuels or carbon pricing… alongside strong demand‐side policies and large‐scale international financing."
African producers could also target exports, including to Europe, where low-carbon hydrogen is regarded as a crucial part of the energy transition. African hydrogen from renewable sources could be competitive with supply from elsewhere for export to northern Europe, the IEA said. Delivered costs to northern Europe as liquid hydrogen could be just above $4/kg by 2030, but closer to $3.50/kg if ammonia is used as a carrier, it said. This would be slightly higher than the estimated costs for deliveries from the Middle East, which are at just below $4/kg for liquid hydrogen and under $3/kg if delivered as ammonia. But it would be cheaper than shipments from Australia, especially as liquid hydrogen, based on the IEA calculations.
A number of large-scale electrolyser projects have been announced across Africa, such as in Mauritania. The government of Mauritania and UK-based energy firm Chariot said in May that they will progress with a 10GW renewable hydrogen production plant, called Project Nour. Australian renewable energy developer CWP Global's even larger Aman project in north Mauritania targets electrolyser capacity of 30GW generated by wind and solar power and hydrogen output of 1.7mn t/yr.
