MyBroadband - 2 March 2024 by Shaun Jacobs

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Presentations

Muhammed Patel (TIPS): Green H2: a potential export commodity in a new global marketplace

Jason Bell (CREDD): Insights from green hydrogen for sustainable (re)industrialisation in South Africa paper

Sören Scholvin (UCN): Green hydrogen and linkage-based development in Chile

Bruce Young (Wits Energy Centre): TIPS Development Dialogue Green hydrogen and industrial policy slides

Background

This Development Dialogue seeks to unpack whether green hydrogen is really the technology of the future and its commercial viability. As well as to understand global demand and some of the miss information in the industries for carbon neutralisation.

Globally, countries are mobilising resources to deal with the climate crisis. Climate change stands to impact countries collectively, with the impacts most severely felt by the vulnerable in society. Countries, including South Africa, have to think carefully about improving their resilience to the direct physical impacts of climate change and the effects of the transition. Part of the response involves transforming notorious, high-emitting industries, such as energy and petrochemicals, towards cleaner production.

Given South Africa’s high dependency on coal, and the combustion of coal being associated with high CO2 emissions, South Africa will have to transform key value chains towards more sustainable production. This transformation not only protects the country’s resources from future climate events but also secures South Africa’s future in the global marketplace. The hydrogen economy offers one potential and complementary pathway to a sustainable future. South Africa’s rich endowment of ideal weather conditions for solar and wind power generation, technological capabilities around the Fischer-Tropsch (FT) process, and access to platinum resources, place the country at an advantage for developing the hydrogen value chain and being a key supplier into the global hydrogen market.

While green hydrogen development has gone through a number of historical waves of interest, the current momentum is being driven globally, with a number of countries developing hydrogen roadmaps and strategies to capitalise domestically and in the global marketplace.

This provides South Africa with a window of opportunity to investigate and develop a domestic hydrogen economy, attract investment into developing a new capability, and benefit from this heightened interest in the creation of a new export product. Developing this sector has many potential benefits for the country.

TIPS is partnering with the Department of Trade Industry and Competition (the dtic).

About the Speakers

Presenters

Muhammed Patel is Senior Economist at TIPS. Muhammed’s background spans work in industrial development, and competition and regulatory economics as well as telecommunications and the energy sectors.

Jason Bell is an Economist and Researcher at the Centre for Competition Regulation and Economic Development. He is interested in political economy and industrial development issues, focusing on the role of regulation, governments and institutions in fostering growth and the evolution and distribution of power. his sectoral focus covers metals, machinery and equipment, development finance institutions, automotives, climate change and green hydrogen in South Africa.

Bruce Young is Senior Lecturer, Africa Energy Leadership Centre, Business School, University of the Witwatersrand. He is a Chemical Engineer with broadly based business development and technical experience related to the global petrochemical industry with specific expertise in petrochemicals. Expertise in chemical opportunities associated with Fischer Tropsch technology and synthesis gas processing. Specific expertise in formulating business unit technology strategy to support the business strategy. Significant commercial experience relating to technology and licensing agreements. Experienced in mergers and acquisitions in the chemicals business area.

Sören Scholvin is a professor at the Department of Economics, Catholic University of the North, in Antofagasta, Chile. He is affiliated with the Policy Research in International Services and Manufacturing (PRISM) unit at the University of Cape Town. Sören's research interests are extractive industries, global value chains and regional development.

TIPS Dialogues bring together academics, policymakers, civil society organisations, workers, and practitioners
to discuss important issues and share ideas on industrial policy.

TIPS is partnering with the Department of Trade Industry and Competition (the dtic).

BusinessTech - 27 February 2024

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ESI Africa - 27 February 2024 by Yunus Kemp

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In the face of rising electricity costs, persistent power outages (loadshedding), and the emergence of domestic and international carbon taxes, there has never been a better time for businesses in South Africa to adopt renewable energy (RE) to realise significant savings on their electricity bills, lower their tax liability, secure a reliable supply of electricity, and reduce their carbon footprint.

This study focuses on an assessment of RE adoption pathways without a “loadshedding lens”. In particular, it focuses on the commercial viability of different RE adoption pathways and mechanisms (off-site versus on-site, power purchase agreement versus self-owned) by quantifying the savings businesses can achieve on their utility bills and their carbon tax liability by decarbonising their energy source. Furthermore, the study focuses on medium-sized manufacturing firms with a moderate energy profile, and on solar PV generation as it is unlikely that wind can be deployed on-site by most businesses in an urban setting. It  explores the key pathways available to businesses for adopting PV; describes the core assumptions used in the model to generate the results for each adoption pathway; presents results and observations for three different sizes of installed RE capacity, with and without battery energy storage systems, for a representative firm in Cape Town and Ekurhuleni; and summarises key findings and draws policy conclusions.

The European Green Deal (EGD) is a set of policy initiatives by the European Union (EU) with the overarching aim of making Europe the first continent to reach climate neutrality by 2050. The purpose of this study is to analyse the implications of the EGD on African trade. The objectives include understanding the EGD in the African context, and analysing affected African traded commodities and the implications that stem from its introduction. The methodology included a desk review, document analysis, and conducting extensive data analysis using an exposure and vulnerability methodology.

Thes study has five parts.The first part provides an overview of the European Green Deal, and the second part highlights how Africa trades with the EU. The third part highlights the implications for African trade. The remaining two parts examine international responses – what other countries are doing to respond to the EGD and their implications for Africa; and suggested policy responses the African continent can pursue to limit its exposure and vulnerability to any negative trade effects of the EGD.

TIPS industry studies aim to provide a comprehensive overview of key trends in leading industries in South Africa. For each industry covered, working papers will be published on basic economic trends, including value added, employment, investment and market structure; trade by major product and country; impact on the environment as well as threats and opportunities arising from the climate crisis; and the implications of emerging technologies. The studies aim to provide background for policymakers and researchers, and to strengthen our understanding of current challenges and opportunities in each industry as a basis for a more strategic response.

The electrical equipment sub-sector in South Africa encompasses a wide range of products and services related to the generation, transmission, distribution, and utilisation of electrical power. Its history dates back to the discovery of gold and diamonds in the late 19th century and associated requirements for lighting, telecommunications and electrification. The establishment of Eskom in 1922, gradual electrification of the Transnet (then the South African Railways) rail network from the mid-20th century, and the growth of heavy manufacturing industries linked to minerals and energy laid the foundation for subsequent development. Given the sub-sector’s historically close relations to mining and state-owned companies, a number of factors are likely to shape the sub-sector in profound ways.

Industry Studies

International Trends in the Capital Goods Industry 2024

International Trade in South Africa's Automotive Industry 2024

Capital goods in South Africa 2024

Plastics 2024

Clothing and textiles 2024

Auto manufacturing 2023

Electrical equipment 2023

Additional studies for other industries will be added when finalised.

Business Day - 13 February 2024 by Neva Makgetla (TIPS Senior Economist)

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News24 - 11 February 2024 by Lameez Omarjee

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Africa Check - 8 February 2024

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