Africa-Press – Namibia. THE ECONOMICS OF green hydrogen is challenging today, primarily because the underlying costs, skills, knowledge and availability of renewable energy sources vary widely.
It has been estimated that hydrogen demand by 2050 could vary from 150 to 500 million tonnes per year, depending on global climate ambitions and the development of sector-specific activities, energy-efficiency measures, direct electrification, and the use of carbon capture technologies.
The most important development at the 26th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP26) in Glasgow, Scotland was that countries agreed to focus on the tougher 1,5°C aspirational goal of the Paris Agreement, acknowledging that the 2°C target would cause massive devastation to take place.
Research conducted since COP26 has shown a temperature rise of 2°C above pre-industrial levels would cause changes to the climate system that would be, in many cases, catastrophic, and some of them would be irreversible, so switching the focus to a 1,5°C goal represents vital progress.
So at COP27, there will be far more emphasis on climate finance, adaptation and loss and damage – issues of vital importance to developing countries.
That leaves a lot remaining to be done at COP27, and the signs are not good so far.
Only 24 countries have updated their nationally determined contributions (NDCs) between COP26 and COP27.
The energy crisis and economic woes of the past year could even make COP27 a turning point towards clean energy and a low carbon.
Furthermore, it is vital that Namibia’s transmission infrastructure be strengthened and bolstered as the country pursues new renewable energy technologies and these are added into the mix, and as NamPower undertakes its unbundling.
Namibia has a range of supporting and enabling policies that can help steer the way to a green hydrogen economy.
The country is on course to develop a green and blue economy as articulated under national documents such as the national development plans (NDPs) and the second Harambee Prosperity Plan (HPP2).
For Namibia, climate change is as much an economic question as it is an environmental or existential one. A key consideration for policymakers is what a circular economy looks like for Namibia.
As the country braces for a low-carbon future, it needs to pool adequate investments towards renewables to scale up universal access to clean electricity to avert climate disasters.
Earlier this year, Namibia launched a green hydrogen council, as well as a green hydrogen strategy 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.
This is a good move.
FINANCING THE HYDROGEN REVOLUTION
Namibia secured 540 million euros (US$544 million) in climate finance from the Dutch government and the European Investment Bank at the just-ended COP27.
COP27 serves as an opportunity for African leaders to voice their unique needs in the climate crisis. This funding is premised on the principles of an innovative blended finance platform to facilitate and accelerate the development of a green hydrogen sector and economy in Namibia.
The Dutch grant comes from the infrastructure-funding vehicle Invest International, while the European Investment Bank facility will be used to build green hydrogen and renewable energy projects in Namibia.
Andrew Johnstone, the chief executive officer (CEO) of Climate Fund Managers, says: “We’re about to lose the battle against climate change. We believe green hydrogen is the energy transition pathway and the solution.”
Namibia has world-class conditions for generating renewable electricity through solar and wind power, which are key drivers to reducing the production cost of green hydrogen.
To exploit and benefit from this potential, the government has high ambitions for both building large-scale solar and wind farms, and producing green energy carriers and raw materials.
Therefore, the government has commissioned Climate Fund Managers and Invest International to set up a dedicated fund to channel all renewable hydrogen financing in Namibia on behalf of the government.
Furthermore, Joost Oosthuizen, the CEO of Invest International, says: “With this fund, we want to empower the Namibian government to take control of this unique opportunity. It will help the government in their key role to make strategic decisions about investing in projects that strengthen the local green transition.
“In that way it contributes to the development of the country in terms of economic growth, the creation of jobs, and the local use of green hydrogen.”
My fellow citizens, there are a lot of things that divide us, but one thing that unites us, or should unite us, is that we want to see our country succeed in terms of a green hydrogen economy. We want it to stay great and become even better.
It is clear that there is an ideological and political impetus for establishing hydrogen as a key component of the energy mix as part of the movement towards a carbon-neutral environment.
Moreover, we should acknowledge what is already being achieved in our country and take a pragmatic and realistic view of what can feasibly be achieved in the short, medium and long term.
The road toward a green hydrogen economy will not be an easy one as future demand and the structure of the market remain uncertain. To reach net zero emissions will require significant investment in current and new clean technologies, and away from fossil fuels.
Against this background, to realise the true potential of hydrogen locally and to capture the benefits, policy support mechanisms are essential for the penetration of green hydrogen into multiple sectors and encourage sector coupling.
I view green hydrogen as the path forward to full decarbonisation in a way that is reliable. It is important to note that green hydrogen can create more space for renewables by driving electrolysis with energy that would otherwise be curtailed.
It is my belief that a green economy can only be achieved through the commitment and actions of multiple sectors and stakeholders in society, including the government, businesses, and individuals.
Decisions at these levels have the potential to transform local and regional economies.
In addition, a range of enabling conditions, strategic priorities and policy reforms will be required for the redirection of investments and the reconfiguration of infrastructure to support a green hydrogen economy.
In conclusion, with the right support and investment, Namibia will, given time, achieve its own energy transition. A new economic development path is urgently needed.
Therefore, the transition to a green economy will require the adoption of a new economic model and different approach to development, with the reconfiguration of investments – improved governance with robust policy signals, and regulatory drivers that reinforce the need for the economic system.
It is evident that Namibian policymakers need to support a far higher allocation of renewable energy power generation development.
Continued investment by both the government and the private sector will have a significant positive impact on Namibia’s green hydrogen energy future, provided that water is allocated and used in a responsible manner, and the relevant policy and regulatory framework is created to support this technology.
* Josef Sheehama is a banking industry professional with 19 years of experience. He writes in his personal capacity.
It has been estimated that hydrogen demand by 2050 could vary from 150 to 500 million tonnes per year, depending on global climate ambitions and the development of sector-specific activities, energy-efficiency measures, direct electrification, and the use of carbon capture technologies.
The most important development at the 26th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP26) in Glasgow, Scotland was that countries agreed to focus on the tougher 1,5°C aspirational goal of the Paris Agreement, acknowledging that the 2°C target would cause massive devastation to take place.
Research conducted since COP26 has shown a temperature rise of 2°C above pre-industrial levels would cause changes to the climate system that would be, in many cases, catastrophic, and some of them would be irreversible, so switching the focus to a 1,5°C goal represents vital progress.
So at COP27, there will be far more emphasis on climate finance, adaptation and loss and damage – issues of vital importance to developing countries.
That leaves a lot remaining to be done at COP27, and the signs are not good so far.
Only 24 countries have updated their nationally determined contributions (NDCs) between COP26 and COP27.
The energy crisis and economic woes of the past year could even make COP27 a turning point towards clean energy and a low carbon.
Furthermore, it is vital that Namibia’s transmission infrastructure be strengthened and bolstered as the country pursues new renewable energy technologies and these are added into the mix, and as NamPower undertakes its unbundling.
Namibia has a range of supporting and enabling policies that can help steer the way to a green hydrogen economy.
The country is on course to develop a green and blue economy as articulated under national documents such as the national development plans (NDPs) and the second Harambee Prosperity Plan (HPP2).
For Namibia, climate change is as much an economic question as it is an environmental or existential one. A key consideration for policymakers is what a circular economy looks like for Namibia.
As the country braces for a low-carbon future, it needs to pool adequate investments towards renewables to scale up universal access to clean electricity to avert climate disasters.
Earlier this year, Namibia launched a green hydrogen council, as well as a green hydrogen strategy 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.
This is a good move.
FINANCING THE HYDROGEN REVOLUTION
Namibia secured 540 million euros (US$544 million) in climate finance from the Dutch government and the European Investment Bank at the just-ended COP27.
COP27 serves as an opportunity for African leaders to voice their unique needs in the climate crisis. This funding is premised on the principles of an innovative blended finance platform to facilitate and accelerate the development of a green hydrogen sector and economy in Namibia.
The Dutch grant comes from the infrastructure-funding vehicle Invest International, while the European Investment Bank facility will be used to build green hydrogen and renewable energy projects in Namibia.
Andrew Johnstone, the chief executive officer (CEO) of Climate Fund Managers, says: “We’re about to lose the battle against climate change. We believe green hydrogen is the energy transition pathway and the solution.”
Namibia has world-class conditions for generating renewable electricity through solar and wind power, which are key drivers to reducing the production cost of green hydrogen.
To exploit and benefit from this potential, the government has high ambitions for both building large-scale solar and wind farms, and producing green energy carriers and raw materials.
Therefore, the government has commissioned Climate Fund Managers and Invest International to set up a dedicated fund to channel all renewable hydrogen financing in Namibia on behalf of the government.
Furthermore, Joost Oosthuizen, the CEO of Invest International, says: “With this fund, we want to empower the Namibian government to take control of this unique opportunity. It will help the government in their key role to make strategic decisions about investing in projects that strengthen the local green transition.
“In that way it contributes to the development of the country in terms of economic growth, the creation of jobs, and the local use of green hydrogen.”
My fellow citizens, there are a lot of things that divide us, but one thing that unites us, or should unite us, is that we want to see our country succeed in terms of a green hydrogen economy. We want it to stay great and become even better.
It is clear that there is an ideological and political impetus for establishing hydrogen as a key component of the energy mix as part of the movement towards a carbon-neutral environment.
Moreover, we should acknowledge what is already being achieved in our country and take a pragmatic and realistic view of what can feasibly be achieved in the short, medium and long term.
The road toward a green hydrogen economy will not be an easy one as future demand and the structure of the market remain uncertain. To reach net zero emissions will require significant investment in current and new clean technologies, and away from fossil fuels.
Against this background, to realise the true potential of hydrogen locally and to capture the benefits, policy support mechanisms are essential for the penetration of green hydrogen into multiple sectors and encourage sector coupling.
I view green hydrogen as the path forward to full decarbonisation in a way that is reliable. It is important to note that green hydrogen can create more space for renewables by driving electrolysis with energy that would otherwise be curtailed.
It is my belief that a green economy can only be achieved through the commitment and actions of multiple sectors and stakeholders in society, including the government, businesses, and individuals.
Decisions at these levels have the potential to transform local and regional economies.
In addition, a range of enabling conditions, strategic priorities and policy reforms will be required for the redirection of investments and the reconfiguration of infrastructure to support a green hydrogen economy.
In conclusion, with the right support and investment, Namibia will, given time, achieve its own energy transition. A new economic development path is urgently needed.
Therefore, the transition to a green economy will require the adoption of a new economic model and different approach to development, with the reconfiguration of investments – improved governance with robust policy signals, and regulatory drivers that reinforce the need for the economic system.
It is evident that Namibian policymakers need to support a far higher allocation of renewable energy power generation development.
Continued investment by both the government and the private sector will have a significant positive impact on Namibia’s green hydrogen energy future, provided that water is allocated and used in a responsible manner, and the relevant policy and regulatory framework is created to support this technology.
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