Analysing the prospects of grid-connected green hydrogen production in predominantly fossil-based countries – A case study of South Africa

Abstract

Importing substantial amount of green hydrogen from countries like South Africa, which have abundant solar and wind potentials to replace fossil fuels, has attracted interest in developed regions. This study analyses South African strategies for improving and decarbonizing the power sector while also producing hydrogen for export. These strategies include the Integrated Resource Plan, the Transmission Development Plan, Just Energy Transition and Hydrogen Society Roadmap for grid connected hydrogen production in 2030. Results based on an hourly resolution optimisation in Plexos indicate that annual grid-connected hydrogen production of 500 kt can lead to a 20–25% increase in the cost of electricity in scenarios with lower renewable energy penetration due to South African emission constraints by 2030. While the price of electricity is still in acceptable range, and the price of hydrogen can be competitive on the international market (2–3 USD/kgH₂ for production), the emission factor of this hydrogen is higher than the one of grey hydrogen, ranging from 13 to 24 kgCO2/kgh₂. When attempting to reach emission factors based on EU directives, the three policy roadmaps become unfeasible and free capacity expansion results in significant sixteen-fold increase of wind and seven-fold increase in solar installations compared to 2023 levels by 2030 in South Africa.