In a joint interview, six experts explain the prospects of Power-to-X for local economic development and climate protection in the pioneering countries Argentina, Brazil, Kenya, Morocco, South Africa, and Tunisia.
Aradhna Pandarum, Acting Research Group Leader at Energy Centre, Council for Scientific and Industrial Research (CSIR), South Africa
Ayoub Hirt, Head of Department Green Chemistry, Bioenergy and Agritech, Institut de recherche en energie solaire et energies nouvelles (IRESEN), Morocco
Balkis Jrad, Head of Department of Project Evaluation in the General Direction of Electricity and Energy Transition at Ministry of Industry, Mines and Energy Tunisia
Benson Mwakina, Director Renewable Energy, Ministry of Energy, Kenya
Eduardo López, Researcher at Chemical Engineering Pilot Plant (Plapiqui), National Research Council (CONICET), Argentina
Juliana Rangel do Nascimento, Energy Research Analyst of the Energy Research Office EPE, Brasil
Oussama Bayssi, R&D Engineer Biomass & Agritechnology, Institut de recherche en energie solaire et energies nouvelles (IRESEN), Morocco
Green hydrogen and PtX is currently hotly debated for its high potential for economic development and defossilisation. Where does the country you are working in currently stand with regards to the production and market take up of Power-to-X?
Aradhna Pandarum: In South Africa, we have definitely realised that we have the need to look at other sectors apart from the electricity sector to decarbonise our economy and to reduce our greenhouse gas emissions. And green hydrogen plays a role in that it offers the opportunity for multiple sectors to decrease their greenhouse gas emissions especially in what is referred to as the hard-to-abate sectors like the transport and chemicals industries.
Balkis Jrad: In Tunisia, we have already started. Since 2020, our renewable energy transition strategy includes PtX. We are now preparing our national strategy and a roadmap as to how to integrate hydrogen and PtX in our local economy, possibly also promoting export, by 2050. The infrastructure and the know how about the energy transition is already there, which puts us in a good starting position for green hydrogen.
Eduardo Lopez: We are in the early stages for PtX development in Argentina. There are pilot scale hydrogen projects, but no focus on PtX yet. However, the government is preparing a green hydrogen law and a roadmap for hydrogen. Like Tunisia, the intention is to integrate PtX products into the local market, such as ammonia for fertilisers in the agriculture and ammonia/methanol as fuels for maritime shipping at the Argentinian ports.
Ayoub Hirt: In Morocco, we’ve taken quite a few steps already. We started with studies in 2018 to inform the development of the national roadmap. Currently, we focus on studies on infrastructure, laws and standards and the industrial cluster we created in 2021 to closely involves the private sector. With Morocco’s high renewables potential, 20 % of the expected green hydrogen production satisfies the local demand, meaning that 80 % could be exported. However, looking at PtX, it is different. For hydrogen, we don’t have a high local demand, but for ammonia, methanol, and other chemicals, we do. So, in Morocco, we are talking more about the PtX than green hydrogen. Of course, we still need hydrogen for producing PtX products.
Juliana Rangel do Nascimento: Talking about Brasil, the most important step we took so far was to construct the legal framework to develop hydrogen as part of our energy matrix and create the market by setting up guidelines and a roadmap. Besides that, we developed the National Hydrogen Program (PNH2) which was designed to mobilise the public and private sectors, as well as the academic, together with international cooperation, to accelerate the development of a broad and competitive hydrogen market. The total technical potential estimated for hydrogen production in Brazil until 2050 is 1.8 Gt/year, which represents more than 14 times the world demand for hydrogen in 2018, considering that 55% can be obtained from renewable resources. Nowadays, Brazil has about 16 projects involving the production of hydrogen in different stages: some in pilot scales and other in commercial scales (9 projects). These projects are undergoing technical and economic feasibility studies. (PDE2031, 2022).
Oussama Bayssi: I would like to add that in Morocco, R&D plays a huge role. We really want to look at all steps of the new PtX value chains. We are developing pilot projects in addition to a R&D platform to look at electrolysers, carbon capture, to produce different products like green ammonia, green methanol production, synthetic fuel. This will be of much use to set up the PtX economy in Morocco.
Benson Mwakina: In Kenya, we have abundant resources for renewables, especially hydro and geothermal. Approximately 92 % of our energy uptake comes from renewable energy sources. But this also means that at night and on off peak hours, that energy goes to waste. So green hydrogen and PtX are now a very good opportunity for us to make use of that. Currently, we’ve set up a working group looking at how to install the first 50 MW of electrolyser capacity. And we want to partner with the Kenyan public electricity generation company that produces about 70 % of the electricity in Kenya.
So green methanol, ammonia, and fertiliser seem to be in the focus. Are you looking towards other applications as well?
Rangel: We may also look towards using fuel cells in transport and PtX to defossilise chemical processes. In Brazil’s case, PtX could improve the quality of diesel and gasoline. Heat and power storage might also be worth considering. The main uses and opportunities for Brazil are: fertilisers, energy storage to allow greater insertion of variable renewables in the electrical mix, hydroprocessing of vegetable oils to make advanced biofuels like HVO, jet biokerosene and bio bunker and use of fuel cells in vehicles and equipments (such as industrial forklifts), in addition to exports. In our case, large machines in mining, steel and heavy trucks, as well as fuel cell vehicles with ethanol will also be opportunities in the longer term. We consider that Brazil will not only be a supplier of green commodities, but also a competitive hydrogen economy that will produce, including for export, minerals, steel, metals, ammonia, agricultural commodities and other low-cost or zero carbon industrial goods and services (PDE2031, 2022).
Pandarum: Since our hydrogen society roadmap from 2021, we are creating the enabling factors for pathways which show the highest potential for decarbonisation. Then from a point of holistic feasibility, the projects will be prioritised for development. High priority projects that have been identified are the fuel cells within what is referred to as the hydrogen valley, trying to make transportation within the major South African freeway routes green. We’ve piloted a mining truck running on green hydrogen already. Sustainable maritime fuel is also gaining increasing interest and we are busy with projects to determine the feasibility and viability of this production at various ports in the country. We are also looking towards green hydrogen for buildings, because we do see that there is potential to reduce the carbon footprint in buildings. Within the electricity sector from a network or grid perspective, research into hydrogen for grid storage is also being conducted. So, we are open to many pathways, but the focus now would be export, most likely of green ammonia, because of the demand and willingness to pay premium prices from regions like the EU. Long offtake agreements will be key for that to happen.
Mwakina: Our working group is also identifying the most valuable pathways for PtX in Kenya. We’re already focusing on fertilisers and setting up manufacturing plants. Adding as much of the value chain in one premise such as an industrial park will deter the issue of transportation. Ahead of that, we are looking at energy storage to stabilise the grid with intermittent nature of wind and solar. There is an abundance of plastic manufacturing companies in Kenya, which we want to include from the early stages so that they are involved in transition from the beginning.
Lopez: In Argentina,we have a special interest in replacing grey ammonia in fertilisers, part of which we are also importing. Methanol is forecasted to become relevant in the shipping sector. Actually, the transport sector including the ports is one of the main contributors to carbon dioxide emissions in Argentina. Another avenue is to replace fuel oil that is still used for electricity generation.
Jrad: The Tunisian chemical sector is the most polluted in the country, while being dependent on importing 100 % of its ammonia demand from Russia and India. So, the huge opportunity is to produce green ammonia ourselves to become less dependent while decreasing pollution, especially in the South of the country. The other main avenue we are exploring is how to use the existing infrastructure, the pipeline from Tunisia to Italy, to blend in hydrogen or even how to use another pipeline to transport pure hydrogen between Tunisia and the EU. That’s the two options that we are discussing now.
Let’s look at sustainability. Which chances do you see for economic and social development with PtX and green hydrogen?
Jrad: PtX and hydrogen might upgrade existing renewable energy jobs in engineering and research. I would not overstate the chances of PtX for jobs creation, but it is a good opportunity to grow and diversify the Tunisian economy.
Rangel: In Brasil’s case,I see a similar situation in creating opportunities for the experts in sun, wind, and biomass that have gathered a lot of experience. With hydrogen, our focus really is on the revelatory impact on the energy transition. In addition to considering the life cycle of greenhouse gas emissions used in hydrogen production and transport processes, some sustainability criteria must also be considered, such as conservation of natural resources, pollution management and control, conservation biodiversity and ecosystems. The strategic socio-environmental opportunities were acknowledged: use of waste and residues for energy, resources, and infrastructure optimisation, and sustainability mechanisms for energy projects. The use of waste and residues for energy is a chance to produce energy and improve waste and residues management based on sustainable business models and improving social, environmental, and economic aspects for Brazilian society (PDE2031, 2022).
Mwakina: One potential we see in Kenya is that once the technologies will be market-ready, we can start producing green ammonia and fertiliser in the country. Then the prices will come down. With this, and the same is true for the chemical industry, Kenya will become less dependent on imports.
Pandarum: In South Africa, we are focusing on creating our own manufacturing potential. We have access to rare metals needed as catalysts for electrolysers. We want to use that to our advantage. We plan to grow our local steel manufacturing. Not just assembly work but creating jobs via expanding the value chain. However, it must be based on the feasibility and the long offtake agreements that I’ve mentioned. Of utmost priority is the transition of the coal regions to local energy transition hubs. One current challenge is to identify the right skills to develop and create curricula based on that. Obviously, in this whole process, we need to involve communities to ensure social inclusion and promote enterprise and entrepreneurship development. The energy industry support programme to be launched by the CSIR will assist with this need. It supports small and medium size enterprises by helping entrepreneurs with technical knowledge that they need to then create employment opportunities in the country.
Hirt: In Morocco, we do see a lot of positive impacts as we are talking about PtX, not just green hydrogen. Because if we are talking about creating jobs, green hydrogen does not offer as much potential as ammonia, methanol, kerosene, and diesel. For producing these, chemical plants will need to be installed, where engineers are needed. We expect that the emerging PtX industry can create up to 130.000 new jobs in the country. The second point is that the PtX market uptake also promotes renewables deployment in Morocco. By 2050, 52 % must be renewable. And one hydrogen or PtX requires us to install 8 GW. However, we must consider aridity as one of the main sustainability issues. Solutions such as water desalination and especially sea water desalination are needed. A lot of places with high PtX potential such Tunisia and Namibia have the same issue. But it will also reinforce the national plan to install more water treatment plants. For applications, Morocco is highly interested in ammonia for fertilisers, but as a next step also for other sectors. In the future, we might talk about green steel, heavy trucks, mobility and then in 2050 we can talk about Power-to-Heat and aviation.
Bayssi: In terms ofESG aspects, it’s necessary to look at scope 1 to 3 emissions. We see with companies such as Covestro that this is already reflected upon. For jobs, not just the number of new jobs should be considered, but also the quality and the level of inclusion of women.
Thank you so much for taking the time for the interview!
The interview was held on August 26, 2022, in Frankfurt, Germany.