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SA’s proposition in the green hydrogen sector

Kaashifah Beukes, CEO, freeport Saldanha Special Economic Zone (SEZ). Earlier this year, Ms Beukes was part of a discussion on “energy access, imports and innovation at the inaugural Africa’s green economy summit in Cape Town.

 

The freeport Saldanha SEZ is poised to become one of the first movers to establish a green hydrogen hub in South Africa. Tell us more about this process and your vision.

I think Saldana represents quite an amazing and interesting opportunity for the green hydrogen sector. We see it as one of the first movers for South Africa’s projects in the pipeline because it has so much enabling infrastructure already invested in it. It has an operational port, there are railway lines, but, importantly, and quite compelling is that it has a steel mill. ArcelorMittal has been operating the steel mill day for many years. Unfortunately, it’s gone into care and maintenance over the last few years. And we’re working with Sasol,  ArcelorMittal and many other project developers on the notion of the green hydrogen opportunity in Saldana. It has existing industry but also all of the associated engineering companies in and around it. Another value add to Saldana as a first mover is in the mobility sector. There’s quite a lot of heavy haul long-distance freight that happens from and to Saldana. I think these multiple end use cases, if you will, of the green molecule makes Saldanha quite an interesting first mover.

What in your view are the major challenges?


Some of the major challenges, and I don’t think South Africa is alone in this, is that this is a new area. Yes, hydrogen has been around for many years, and luckily South Africa has the institutional and the industrial know-how to produce hydrogen at scale. But the greening, let’s say, of the molecule is new, because there is a price premium to be paid in first takers or first movers. I think that’s the major challenge: that clarity of we all need to ensure a transition in our energy in our industrial systems, but who is going to stimulate that market offtake and the pricing that goes with it, and what agreements can be forged internationally to foster that pioneering work in the beginning. So, I think it’s all wrapped up in that it’s a new field in terms of the price premiums, and giving clarity and certainty to the financial support that is going to be offered.

The other aspects are standardisation and certification. We know that South Africa has a mixed electricity system, and we are trying to transition and we are examining and exploring the value of this new frontier of investment. But we need to make sure that the rules of participation, the way that we certify and standardise our investments and our projects don’t hinder South Africa’s existing industry to participate and transition themselves.

What else are you focusing on for future growth of the SEZ?


What we’re also focusing on is the necessary skills development. We have a long history in the freeport of making certain that we put the benefits and the potential of the SEZ front and centre to the very people that we hope will draw upon him. So, we have been doing skills development, enterprise development, supply and contract development for many years in the freeport through the levers and the programmes that we have. And one of the first things that we did was we sought out partnerships with like-minded institutions and raised awareness on this aspect of skills for this industry that still needs to be competitive and accessible. So, we’re looking forward to partnerships that we forged in the digital technology space, in community engagement, all aspects of skills development to complement the future growth of the SEZ, but the region in its entirety.

You are also the chair the SEZ CEO forum, representative of all the SEZs in South Africa. How is the SEZ sector doing? And on the continent?


As chair of the SEZ CEO forum, we communicate, work and collaborate a lot across the SEZs, some of which have been around for many years. And I think for those that have been around for longer, like for example, Coega or Richards Bay, they are doing quite well. They are forging ahead in their sectors in their areas and even going outside of South Africa to share the unique experiences and skills.

And I think that part and parcel of that is also looking at trade enhancement across the continent; that is the one of the core aspects of any SEZ programme wherever they are, it’s about trade and investment. So I think that with the good work that is happening in each of these SEZs, that they stand poised really to be catalytic levers for continental trade and investment. I think that’s really the next frontier for the SEZ programme.

In Feb 2023, at the inaugural edition of Africa’s Green Economy Summit in Cape Town, you were part of a discussion on “energy access, imports and innovation.” what were your impressions of the event?


Reflecting on the summit earlier this year, I really enjoyed some of the diversity of the attendees. It makes it quite a useful platform to engage with. Therefore, the range of the topics that it tackled, and put on the platform was quite useful. A lot of good connections were made during the summit, and I look forward to next one, building on from this year.

Anything you would like to add?


I think that South Africa has a unique value proposition in the green hydrogen sector, and I know that there’s quite a lot of news about it, and one would almost think that we are playing catch-up to some of the countries that have gone before. But, what I draw upon is that the green hydrogen economy is largely for industrial purposes, and we have proven that we can make the molecule, and that we have very competitive IP in this field.

So I think that South Africa has a very unique value proposition to add to other areas, and also that it has existing industry in the new areas of where production could be, such as in the Northern Cape, the Western Cape and the Eastern Cape. And it’s a really interesting time for South Africa in its electricity and its energy transition journey.

About the author

VUKA Group
Staff Writer
VUKA Group is a business with a purpose. We are deeply engrained in the fabric of Africa and the emerging industries therein. As the parent company of leading conferences and media publications in various industries across Africa, VUKA Group serves as the central hub for all key sectors. With 20 years of experience operating in the African market, VUKA Group has become an ...
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