Just this week, the Federal Government of Nigeria signed a 1.2MMMTPA (1.2 million metric tonnes per annum) gas supply deal with Germany. The gas will be exported from the Riverside LNG facility located in Ogbelle, via the Onne port in Rivers State. Similarly, the German DWS Group signed a $500 million MoU with the Union Bank of Nigeria to invest in renewable energy projects in rural communities across Nigeria. This has dominated major news outlets in Nigeria within the week.
However, during the visit, the German Chancellor, Olaf Scholz, mentioned an investment opportunity that is being keenly explored by the Germans, the need for green hydrogen export from Africa. The chancellor was quoted as saying: “In Germany, we will need large quantities of green hydrogen on our way to climate neutrality in 2045, a significant portion of which we will import, including from Africa.” The Germans intend to achieve a net zero CO2 emission by 2045 and they are working hard to meet this target. There is already a 2 billion Euro fund dedicated to creating a market for Green Hydrogen import. The European Union, EU, has committed 70 billion euros to the green hydrogen economy by the year 2030.
Hydrogen, an important energy vector, can be produced using coal, gas, or electricity. Green Hydrogen is produced from electricity generated from renewable energy sources by slitting water into oxygen and hydrogen. According to the International Energy Agency, one of the attractions of Hydrogen and hydrogen-based fuels is that it serves as a key component in the energy mix due to its ability to be a solution in sectors where carbon emissions are hard to eliminate such as heavy industry and long-distance transport. Hence, Germany and other industrialised countries are making investments in various countries of the world to secure the supply of green hydrogen for their domestic need and their national energy security.
For example, after the Russian invasion of Ukraine in 2022, the European Commission came up with the REPowerEU, which targets 10 million tonnes of domestic renewable hydrogen production and 10 million tonnes of green hydrogen import by the year 2030. As Germany and other Western countries continue to adopt hydrogen technology, various application areas are being developed and will continue to emerge. For example, in her keynote address on Monday, November 2023 at the European Hydrogen Week held in Brussels, the EU Commission president, Von der Leyen highlighted application areas for hydrogen fuel to include trains and buses in European cities using hydrogen as fuel. Even planes have been propelled with liquid hydrogen. As the application areas continue to spread, it will, in no distant future include the electricity sector, particularly for energy generation and storage. As posited by the Executive Director of the International Energy Agency, Dr. Faith Birol: “Hydrogen is today enjoying unprecedented momentum. The world should not miss this unique chance to make hydrogen an important part of our clean and secure energy future.”
The global hydrogen market is estimated to be worth $2.5 trillion by the year 2050 according to a report by Edmonton Journal. Due to the abundance of solar energy resources in Nigeria, the Green Hydrogen Atlas developed by the Institute of Energy and Climate Research placed Nigeria’s landscape as highly favourable for green hydrogen export and transport infrastructure. The country has the potential to generate 15,510.08 TWh/yr of green hydrogen by 2050. This placed Nigeria in a comparative advantage in the production of green hydrogen and thereby suitable to be relevant in the budding global hydrogen economy. As Germany and other European countries look to Africa for their green hydrogen export, it is imperative to ask; what infrastructure development strategy should be adopted by Nigeria to be a relevant player in the global energy market? Is the infrastructure to be developed to cater only to the export market? What should be done to avoid the resource curse experienced in the petroleum sector?
Therefore, there is a need to further develop a more coherent and robust roadmap that exceeds what is currently embedded in the National Energy Master plan approved by the Federal Executive Council in 2022. The document contains information regarding developing the hydrogen sector up to Technical Readiness two only. However, there are essential areas where policy needs to be developed regarding the green hydrogen infrastructure development. These will include five key aspects of the hydrogen infrastructure viz:
Hydrogen Production; Hydrogen Storage; Hydrogen Transportation; Hydrogen Utilisation and Access to Finance.
All these five key aspects can be encapsulated in a national green hydrogen policy that will encourage integrated development in these areas. Such an infrastructural development policy framework must create a value chain that can be easily coupled with the local industries.
Hydrogen production and transportation for export have the potential to fetch Nigeria some foreign exchange earnings. According to a World Bank projection, 22,000 TWh of green electricity will be required to produce 500 million tonnes of green hydrogen per year by 2050. However, this should not be at the detriment of the livelihood and well-being of the citizens. Nigeria is currently unable to meet its energy demand. Hence, green hydrogen production could be developed in a way that will not impede access to electricity nor make it less affordable. Electricity from solar PV, wind turbines, biomass power generators, and/or other renewable sources of electricity are needed to generate green hydrogen from electrolyzers. Renewable energy that will generate the needed electricity could be developed in conjunction with meeting the domestic energy demand. Therefore, green hydrogen production will support the national grid expansion and might even become part of the integrated mini-grid concept that is being developed in the country.
To be continued tomorrow.
Adewumi, an engineer, is an energy researcher at the Centre for Petroleum, Energy, Economics and Law, a John D. and Catherine T. MacArthur Foundation-funded Centre of Excellence at the University of Ibadan.
