The East Africa Hydrogen Corridor, AHP Feature Article of the 2022 Hydrogen Report, COP 27
In 2022, the International Renewable Energy Agency (IRENA) published a world map showing the potential of various regions around the world for producing green hydrogen; and Sub-Saharan Africa is shown to have, by some margin, the best potential of all.
Historically, there has been a perception that a gap exists between supply and demand for carbon-free hydrogen, with both sides lacking ‘secure volumes’ from the other, and that this central problem needs to be overcome before large-scale commercialisation of green hydrogen can get underway. But the real issue is that the commercialisation of low carbon hydrogen will not be possible until green hydrogen can be sold at a competitive price (in relation to fossil fuels) and once this happens then the ‘chicken-and-egg’ impasse will disappear.
Once green hydrogen can be sold at a competitive price, supply and demand of the market will develop automatically. In the first instance, we will see this happen where green hydrogen can be provided at the right price for domestic consumption in Africa. At a later date, this will happen in relation to green hydrogen produced for export as well. Whether green hydrogen can be provided at a competitive price depends on where the green hydrogen is going to be consumed: broadly speaking, whether that price is equal to or less than the price at which fossil fuels are sold in the same place, while considering the cost of transportation.
Although it may not make economic sense to export large amounts of green hydrogen to Europe in 2022 (even assuming that the necessary infrastructure had been created) there are a number of scenarios where green hydrogen can be produced profitably and delivered in Africa for domestic consumption. For instance, in many parts of Africa green fertiliser locally produced from green hydrogen will be significantly cheaper than imported grey fertiliser made from natural gas. This is principally because of the high cost of natural gas and the high cost of transportation internationally and within Africa.
Please read the full AHP Feature Article of the 2022 Hydrogen Report here:
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