Green hydrogen vision
Namibia is aiming to become a green hydrogen superpower in the coming decade by positioning itself as a leader in the emerging markets and an international exporter of green hydrogen. Green hydrogen will be an important source of foreign investment and be important for the country’s energy security and transition. The government plans to use it extensively to decarbonize its own economy.
Namibia has a potential to offer low-cost green hydrogen production (second only to Chile) owing to its abundance of solar and wind resources. It is thus facilitating the research and development in the field of green hydrogen technologies with aid from foreign institutes, with support from partner countries like Germany. The development of the green hydrogen market is critical to upskill the domestic workforce and maximize local employment.
“We shall deliver Namibia’s Green Hydrogen strategy, outlining a clear pathway to unlocking even greater investments and to establishing Namibia as a regional and global decarbonization champion.”- H.E. Dr Hage G. Geingob, President of the Republic of Namibia
Namibia’s Green Hydrogen Council launched its green hydrogen strategy at COP27 in Sharm El-Sheikh, which supports the country’s commitment to the Paris Agreement on climate change, with the ultimate goal of reducing emissions to net zero by 2050.
The strategy will also allow Namibia to become a net exporter of energy by unlocking its potential to meet global demands of 10 million metric tons by 2030 while playing a pivotal role in energy security for the region.
The strategy will also enable the country to continue its global outreach campaigns and foster hydrogen diplomacy to inform potential investors, project developers, and international development partners about Namibia's hydrogen opportunity.
The activities required to achieve the objectives as set out in the strategy include:
- Establishing an appropriate and fit-for-purpose structure to help develop the green hydrogen industry. The envisaged structure will also be responsible for planning, procuring, and monitoring future green hydrogen projects developed on state-owned land.
- Crafting and enacting the Synthetic Fuels Act as a comprehensive regulatory framework to create an enabling environment. This legislation will ensure compatibility with international green fuel, certification, health and safety, and environmental standards.
- Launching pilot projects to build knowledge, local EPC companies and capabilities to construct and deliver local component manufacturing.
- Planning and developing an ownership and governance model and shared ecosystem for Common User Infrastructure to lower development costs and risks.
- Putting in place training programmes and policies to enable Namibian citizens to participate in the hydrogen economy and supply talent to the industry.
Capacity and price
The new Namibian green hydrogen strategy targets a production of 10-12 million tonnes per annum hydrogen equivalent by 2050.
Through the pilot project of HYPHEN Tsau Khaeb, Namibia has set a Hydrogen production target of 300,000 tonnes per year
The electrolyser capacity target for the Hyphen Tsau Khaeb project is 3 GW.
McKinsey estimates that Namibia could be producing green hydrogen at US$1.5/kg by 2030.
Targets for using green hydrogen in key industries have not yet been established.
Green hydrogen bidding: In 2021, the Namibian government (through the public intermediary Green Hydrogen Namibia and with support from the Namibia Investment Promotion and Development Board) issued a request for proposal for renewable energy and green hydrogen project developers to bid for feasibility study rights with an option to develop renewable assets. A preferred bidder was announced after five months after a competitive tender process. The government is planning to launch a second tender process in 2022, through a competitive tender process under its Southern Corridor Development Initiative.
Following a public tender to select a green hydrogen project developer, the government is entering into an agreement with Hyphen Hydrogen Energy for a $9.4 billion project. The project is based in an area of ~4,000 km2 of land within the Tsau Khaeb National Park, near the coastal town of Luderitz and will ultimately produce around 300,000 tonnes of green hydrogen per year.
The project will start production in 2026 and the rights to the project has been granted to Hyphen for a 40-year period. The cost of green hydrogen produced in Namibia will be between $1.73- $2.30 per kg, with exports foreseen to start before 2025. The project is expected to create 15,000 direct jobs during the first four years of construction and further 3,000 permanent jobs, with 90% being locals.
The total investment required in the project is estimated at $9.4 billion. Hyphen expects to begin producing from its first 2 GW phase in 2026, costing $4.4bn.
The Government is considering holding 24% equity in the project in Khaeb National Park and looking at options for mobilising finance to cover its share.
EUR 40 million has been provided in technical assistance by the Government of Germany for the pre-feasibility stage.
Government green hydrogen lead
Office of the President
Ministry of Energy & Mining
Portal: Green Hydrogen Namibia