South Africa being endowed with 90% of globally known platinum reserves could enable the country to lead a global hydrogen revolution, Deputy Minister of Mineral Resources Nobuhle Nkabane said on Wednesday.
Speaking at the 25th African Energy Forum (AEF) currently underway in Nairobi, Kenya, Nkabane said South Africa's launch of a futuristic Hydrogen Valley was an opportunity to unlock growth, revitalise the industrial sector, and position South Africa to be an exporter of cost-effective green hydrogen to the world.
This as Nkabane referred to the signing of a letter of intent between Eskom and the Kingdom of the Netherlands on Tuesday to further their collaboration on the development and implementation of ‘Just’ initiatives that enable job creation, drive economic growth and improve the local environment surrounding the Grootvlei Power Station as the power station transitions from coal generation into a renewable energy hub.
On Tuesday the a new SA-H2 Fund, a blended finance fund, was launched to facilitate and accelerate the development of a green hydrogen sector and circular economy in South Africa.
It aims to secure $1 billion (R18bn) in funding, to be raised directly in South Africa or indirectly via other channels.
Nkabane said the Just Energy Transition in South Africa faced several challenges, including the high cost of renewable energy technologies, the limited availability of financing and the need for infrastructure upgrades.
Nkabane said in Kenya that the single-most challenge South Africa faced to address the energy crisis was the grid unavailability, pointing out that 3200MW wind capacity of the 4200MW procured under bid window 6, which could not be allocated due to grid unavailability.
“Our Independent Power Producer Office will expand on measures undertaken to address the grid challenges and will outline potential investment opportunities in this area. This financial year, we intend to procure the following additional generation capacity: 10 000 MW of renewable energy, Battery Storage with a capacity totalling 1 230MW, Gas-to-Power totalling 3 000 MW and 2 500 MW of nuclear energy.
“We encourage investors to be on the lookout for these investment opportunities,” Nkabane said.
She said the government’s unlocking embedded generation had seen benefits for companies including Gold Fields, which invested in a 50 MW plant, which had helped to achieve a 10% production growth despite the 9% decline year-on-year in the mining sectors’ overall production.
“Therefore, the industry’s investment in expanding its own electricity capacity to power its operations gives us hope,” Nkabane said.
She said through the Risk Mitigation Independent Power Producer Procurement Programme and the Renewable Energy Independent Power Producer Procurement Programme, there had been procured a total of 7786 MW through Bid Windows 4, 5 and 6. A total of 2130 MW were connected to the grid. A total of 150 MW and 784 MW are envisaged to be operationalised in November 2023 and August 2024, respectively.
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