Prieska Power Reserve Project a first of its kind for Green Hydrogen Energy in South Africa

Today, together with the Premier of the Northern Cape, Zamani Saul, Head of Infrastructure South Africa, Professor Kgosientsho Ramokgopa, the directors of the Prieska Power Reserve and the Industrial Development Corporation (IDC), I visited the Prieska Power Reserve Green Hydrogden Project, a ground-breaking project for South Africa in the green hydrogen space.

This first of its kind green hydrogen and ammonia project was founded and developed by an African Black women-led company, Mahlako a Phahla, in partnership with the Central Energy Corporation (CENEC) and the Industrial Development Corporation (IDC).

The Prieska Power Reserve valued at R9.7billion is a catalytic project within the South African hydrogen ecosystem and will contribute not only to the development of the industry, but also to the economic recovery and growth of our country.

South Africa has been researching the potential of the hydrogen (H2) economy since 2007 through H2 South Africa (HYSA) led by the Department of Science and Innovation (DSI).

This work has predominantly been focused on green hydrogen’s application in green mobility with a focus on green hydrogen powered fuel cell electric vehicles as an alternative to internal combustion engine vehicles.

This was supported by the platinum group metals sector as approximately a third of platinum sales are used in the production of catalytic converters for internal combustion engine vehicles.

Over the past two years there has been a proliferation of net zero commitments by nations and corporations. This has brought a renewed focus for the a need to decarbonise traditionally ‘hard-to-abate’ sectors such as: heavy duty transport; aviation; maritime; and heavy industries like steel, cement and ammonia manufacturing.

These hard-to-abate sectors cannot be decarbonised through renewable energy and electrification or through renewable energy and battery storage. Green Hydrogen provides the best long-term opportunity to decarbonise hard-to-abate sectors as its use is free of emissions. Green H2 is also a Just Energy Transition and empowerment enabler.

South Africa has a number of strategic advantages which could make it a globally competitive green hydrogen production area. These advantages include the following:

• A superior renewable energy endowment of both onshore wind and solar.

• Renewable energy is the largest cost component in the production of green hydrogen.

• South Africa also holds the largest concentration of known Platinum Group Metal reserves. Platinum is a major component in the manufacture of fuel cells and Polymer electrolyte membrane electrolysers and 90% of known reserves are in South Africa and Zimbabwe;

• The availability of large tracts of relatively cheap land for renewable energy production;

• A large electric grid for the wheeling of renewable energy and a large domestic industrial base as a source of local demand.

Green H2 is still an emerging sector but is one with significant potential. Over the past 12 months Infrastructure South Africa (ISA) has been working with the Northern Cape and Gauteng provincial governments to develop catalytic green H2 projects that will underpin provincial green H2 strategies with the Northern Cape being the production hub and Gauteng being the domestic demand hub.

These projects and strategies together with the Department of Science and Innovation’s H2 Society Roadmap for South Africa will be the foundation of a national green H2 strategy.

About the project:

The Prieska Power Reserve Project, situated in the Siyathemba Local Municipality, in the Northern Cape Province, is a first of its kind green hydrogen and ammonia Project. The first phase of the Project is expected to start production in 2025. This phase is expected to produce 72 000 tonnes of green ammonia a year with a green hydrogen content of 12 900 tonnes.

The expansion of the Project to over 500 000 tonnes of green ammonia by 2030 is expected to further contribute to catapulting South Africa into a global leader within the global green hydrogen market.

The Project has taken important strides toward achieving its objectives and has met a number of critical milestones to date:

• In June 2022, the project welcomed the IDC as a key partner through a facility that will help advance the development phase. The approval of the facility will ensure that the project reaches financial close in the first half of next year for a journey that began in 2018.

• The project has also partnered with global leaders in the green hydrogen space, including the German-based Thyssenkrupp Group and Siemens Energy. In August 2022 the Project developers have signed an agreement with Thyssenkrupp to develop the front-end engineering design for the facility.

• The Project has obtained the commitment and support from the Office of the Premier of the Northern Cape as well as the Siyathemba Local Municipality;

• Some of the completed milestones include the construction of a wind mast, chemical plant, solar and micro-grid feasibility studies, which indicate a huge potential for the project.

• The Project has secured land for the first and subsequent phases of development

• The Project has received the necessary environmental approvals for the solar and chemical plant portions.

• A grid stability study is currently being conducted by Siemens Energy on the electrical infrastructure package.

• The Project has secured funding from the Industrial Development Corporation to facilitate the development activities of the project.

• The Project has been showcased at the recent 26th United Nations (UN) Climate Change Conference of the Parties (COP26). The project also addresses 8 out of the 17 UN sustainability goals.

In full recognition of the national significance and importance of this Project, Prieska Power Reserve has been identified as Strategic Infrastructure Project (SIP) in the Northern Cape’s Green Hydrogen strategy and the Project has undergone the process of achieving classification as a SIP, currently awaiting gazetting.

The Prieska Power Reserve Project aims to be a socio-economic contributor through the creation of jobs – current and jobs of the future, the creation of black and female industrialists within the space, small business development and local content procuring and skill development.

Contribution to the South African Economy:

South Africa's Economic Reconstruction and Recovery Plan (ERRP) announced by President Ramaphosa in October 2020 places the issue of industrialisation, job creation, investment and new industrial opportunities along the renewable energy value chain strongly on the South African Agenda.

Through its substantial investment into the town of Prieska in the Northern Cape, the

Project aims to form a part of that response by significantly contributing to the socioeconomic development aspirations of Prieska, the Northern Cape, and South Africa’s

as a whole.

We are of the belief that the Project will catalyse a collaborative model between business, the province and national government achieve its hydrogen goals and accelerate the transition to a low carbon future.

The Green Hydrogen Export special economic zone to be developed at Boegoebaai, which will host such mass-scale production, but will also source green hydrogen volumes from projects such as Prieska Power Reserve and emerging players such as Mahlako.

Various governments globally are implementing policies to promote an enabling environment for the uptake of green hydrogen and ammonia. I am convinced that Prieska with an abundance of solar and wind resources, can benefit from this expected growth in green hydrogen and ammonia.

Furthermore, the Project will help to integrate and create an inclusive hydrogen society, enabling meaningful collaboration between industry, labour, communities, and government, while continuing to transform our economic landscape, and simultaneously creating significant numbers of new jobs and strengthening the delivery of basic services.

The purpose of the site visit today was to showcase the work being done to spearhead the development of the Green Hydrogen in South Africa.

In commenting on the project, Meta Mhlarhi from Mahlako a Phahla said that the Project will firmly propel South Africa's position in the global development of the Hydrogen economy forward. “We are heartened by the support and collaboration between Prieska Power Reserve, national government through Infrastructure South Africa (ISA), the Province, and the local community. It is this kind of partnership that will harness the potential of Green Hydrogen,” Mhlarhi said.

Furthermore, Mhlarhi added that the Prieska Power Reserve will enable a positive contribution not just to South Africa’s energy security, but also to job creation, skills development, the creation of green industrialist and establishing and growing new enterprises, all needed for the economic recovery and growth of our country. Minister de Lille said: “I was encouraged by the amount of work already achieved on this project and the collaborative spirit of all stakeholders. It is vital that we all work together to ensure the project is successfully implemented which will bring great benefit to the people of the Northern Cape and South Africa as a whole and put us on the map in the green hydrogen space”.

Source: Government of South Africa