Thursday , November 7 2024

Namibia Bets on Green Hydrogen to Power Europe and Transform its Economy

Nestled on the edge of the Namib desert, a ribbon of rust-coloured dunes stretching towards an unforgiving horizon, a quiet revolution is brewing. King Philippe of Belgium stood alongside Namibian President Nangolo Mbumba earlier this month, not to marvel at the stark beauty, but to inaugurate a project that could change the course of history for Namibia and Europe.

This is Namibia’s ambitious green hydrogen gamble. This multi-billion dollar project aims to harness the country’s vast solar and wind resources to produce clean-burning hydrogen, a potential fuel of the future. It’s a project not without its sceptics, but one that promises to propel Namibia, a nation with a GDP roughly the size of Vermont, onto the global clean energy map.

“We are very committed to this hydrogen and green hydrogen journey,” declared Belgian Energy Minister Tinne Van der Straeten, echoing the optimism that has drawn European dignitaries to the baking plains of Namibia.

Clean energy giants are lining up to be part of this bold vision. Cleanergy Solutions, a joint venture between Antwerp’s CMB shipping company and Namibia’s Ohlthaver & List Group, is pioneering the country’s first commercial green hydrogen plant. This 30-million-dollar project, partly funded by Germany, is just the first step. CMB’s CEO, Alexander Saverys, explains the driving force behind their involvement: “Our customers are asking us to clean up our act… We need to find an alternative for diesel.” With this in mind, CMB has placed a staggering order for 45 ammonia-fueled vessels from China, all ships that will rely on the clean hydrogen Namibia aspires to produce.

Namibia’s green hydrogen dream goes beyond a single plant. The country boasts some of the world’s best solar potential, according to the World Bank, and vast tracts of government-owned land, offering a perfect recipe for large-scale production. The plan is to channel this solar energy into splitting water molecules, generating hydrogen without the harmful emissions associated with fossil fuels. This green hydrogen will then be converted into ammonia, loaded onto tankers at purpose-built ports, and shipped to energy-hungry Europe.

For Namibia, a nation grappling with a limited skills base and the harsh realities of climate change, green hydrogen offers a beacon of hope.  “Either we sit back… or we use our natural resources to contribute to reducing this existential threat,” says James Mnyupe, Namibia’s Green Hydrogen Commissioner. The government estimates that this green leap could double the size of the economy, creating a ripple effect across the region.

The scale of Namibia’s ambition is staggering. The 10-billion-dollar Hyphen project, backed by Germany’s Enertrag, promises a facility powered by enough renewable energy to rival half of South Africa’s entire large-scale renewable capacity. This project is slated to create a “hydrogen valley” in Lüderitz, a remote coastal town, transforming it into a bustling centre of industry.

But Namibia’s green dream hinges on one crucial factor: securing buyers for the green hydrogen it produces. “It’s not a full fantasy,” says Martin Tengler, a BloombergNEF analyst, cautiously optimistic about Namibia’s prospects. However, he underscores, “What is going to matter most… is to find an offtaker” for the hydrogen.

Europe, with its tightening climate regulations and its recent scramble to replace Russian gas supplies, seems a natural partner. Germany, a fervent supporter of the project, is heavily subsidizing its own green steel industry and spearheading efforts to create a hydrogen market across Europe. For Europe’s energy-intensive industries, green hydrogen might be the only viable option to meet stricter environmental regulations. “You cannot electrify those industries,” insists Jacques Vandermeiren, CEO of the Port of Antwerp-Bruges. “You’ll have to bring in the green molecules.”

The road ahead is undoubtedly challenging. Namibia must secure binding contracts with offtakers, and the technology itself is still under development. But for Namibia, the stakes are high. The success of this green gamble could usher in decades of development, a chance to bloom amidst the harsh beauty of the Namib desert. As Walvis Bay’s Mayor, Trevino Forbes, succinctly puts it, “The goal has to be to capitalize on this resource of ours.” The sun-drenched plains of Namibia are waiting, a canvas for a future powered by clean energy and hope.

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