Veteran entrepreneur Mashudu Ramano says SA will lose out on massive economic opportunities created by the global move to hydrogen energy if the government doesn't wake up quickly.
"We have the potential to revolutionise our economy with hydrogen energy, but I think there is a lack of understanding in our government of the role hydrogen can play and the huge potential it has for the South African economy," he says.
"We need a firm commitment by government that we are going to be a hydrogen economy by a certain date. The pegs must be put in the ground. We need policy certainty. The world is moving towards a hydrogen economy. We cannot miss out."
Anglo American recently announced it is conducting a feasibility study on the development of a "hydrogen valley" from its platinum group metals mine in Limpopo to the south coast near Durban.
Ramano, 65, former chair of numerous companies including Johnnic Communications, Airports Company SA, Astron Energy and African Legend Investment, which he founded 20 years ago, has long been working on plans for a hydrogen valley in coal-dependent Mpumalanga.
A study of global trends in the energy space more than 10 years ago convinced him that the future of energy generation lay in hydrogen fuel cells.
He set up Mitochondria Energy Company, which formed a partnership with Austrian engineering company AVL to develop and finalise hydrogen fuel cell technology.
The goal is to build a factory that will produce 250MW in hydrogen fuel cells a year from 2023.
"We're on track with that," he says.
The R2bn project will be the start of a hydrogen valley, which he believes will revitalise the Mpumalanga economy.
Funding of R50m has been secured from the Industrial Development Corporation (IDC) and the Development Bank of SA, and he intends going to the market early next year, when the prototype has been finalised, to bring in more partners.
He says up to 1,500 jobs will be created in the construction phase and 400-800 permanent jobs thereafter manufacturing products ranging from 50kW up to "multi-MW" systems.
"We believe there is a market in the country for decentralised, alternative clean energy solutions, and we're speaking to potential export markets in Europe and West Africa."
They'll initially extract hydrogen from natural gas but "we're aiming ultimately to extract hydrogen from water".
If you still have a
government talking
about putting up
coal-fired power
stations, you ask,
‘What world do they
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After a groundwater assessment of the Limpopo and Olifants water management area, he is confident there is enough water to develop hydrogen production facilities.
French energy multinational Engie, which is involved in Anglo's feasibility study, estimates the local market for green hydrogen could be worth $10bn (R142bn) a year by 2040 - and the export market $100bn.
Ramano says this is feasible and his company is well placed to benefit.
He points out that Eskom will be repurposing 11 of its coal-fired power stations in Mpumalanga.
"That is probably around 20,000MW over a period of time.
"There is pent-up demand for growth in various sectors of the economy, which is being constrained by a lack of energy.
"There are players in the global and domestic steelmaking industry who are going green in that space, as well as in the aviation industry and mining sector, which is having to deal with significant emissions. So this is a huge market. Many sectors of the domestic and global economy have to decarbonise."
He says the government has been "extremely slow" in taking advantage of new hydrogen energy initiatives.
"We've been talking about this for more than a decade."
In spite of increasing global pressure to decarbonise "they're still moving very, very slowly".
"I think their understanding of the significant impact of climate change hasn't sunk in. If you still have a government talking about putting up coal-fired power stations, you say to yourself, 'What world do they exist in?' "
As well as failing to understand the health aspects, it has also failed to grasp the potentially huge economic benefits, he says.
"Here we have the potential to revolutionise our economy with hydrogen energy."
He snorts when asked if he thinks energy minister Gwede Mantashe is the right person to lead the green hydrogen revolution.
"I'll leave that to the president to decide. I think there is a lack of understanding across the board in our government of the huge potential it has for the South African economy."
Engie recently indicated that SA was well positioned to be a global leader in the production and export of green hydrogen because of its rich renewable resources.
"But we're seriously in danger of being left behind. If you see how many countries are investing in a hydrogen future, led by South Korea, we are nowhere near.
"At best we think this is a nice to have. This is not a nice to have. The export potential for South Africa is R1.5-trillion, more than half our current GDP."
SA has all the natural resources to make it happen but there needs to be a firm commitment from the government, with timelines.
"The second thing that is crucial is that we need our financial markets to support a hydrogen future.
"This is one area where we can create an inclusive future. It shouldn't be only the global players that are playing in this space, it should also be local players," says Ramano.
The government needs to develop a policy framework to make the hydrogen economy work for all South Africans, he says.
His concern is that the big players, including multinationals, aided by "bureaucratic rent seekers", will marginalise local entrepreneurs.
"We need to create enabling instruments that will facilitate the participation of local entrepreneurs in this emerging hydrogen economy."
He welcomes the announcement by minister of trade, industry & competition Ebrahim Patel that the IDC is going to champion the development of the hydrogen economy.
"But now we await how the IDC is going to play in this space."
He refers to "a small group of white engineers in Centurion" who designed and developed electrolyser technology essential for the manufacture of green hydrogen energy.
"But they couldn't get support from our government. They had to get support from overseas. That kind of thing should never happen in a country where we want to be competitive in hydrogen."
