Namibia is resolutely committed to the Paris Agreement, and to taking practical and ambitious action to reduce emissions and ensure a climate-resilient economy. The commitment of the Paris Climate Accords and ambitions of the 17 Sustainable Development Goals require ambitious policy commitment and Actual Projects to execute. Namibia has adequately committed to reduce its Green House Gases (GHG) emissions conditionally by at least 91% of its Business-as-Usual scenario. Namibia could potentially produce highly competitive green ammonia, destined for exports due to her low national demand.
Namibia is embarking upon a Southern Corridor Development Initiative (SCDI) a portfolio of complementary projects and infrastructure in the southern region that maximizes the opportunity presented by Green Hydrogen and Ammonia for the country. Green hydrogen offers a unique opportunity to both increase the development of renewable energy in the country while looking into new market opportunities that would economically benefit Namibia.
The global ammonia market today is 180 million metric tonnes (Mt) driven by fertilizers and mining explosives production. The global market is expected to grow to over 500 Mt by 2050 driven by maritime shipping and power systems decarbonization, especially by major developed economies with NetZero policies for 2050. Hence, Namibia being endowed with world-class renewable resources and her proximity to the ocean, places her to become a sub- Saharan powerhouse with dynamic green and blue economies. Therefore, the Government is leading the development of a sector that is designed to achieve a globally competitive price and sufficient infrastructure for maritime export.
The volume potential for green electricity production in Namibia is many times the country’s domestic electricity consumption. The solar resource is one of the world’s best (DNI greater than 2400kWh/m2/year and Gross Capacity over of 30% in selected areas) and wind resource is equally exceptional (Wind speed greater than 8m/s and Gross Capacity Factors over 60% in selected areas) which therefore allows Namibia to significantly contribute to regional decarbonisation goals.
Namibia needs a series of infrastructure that would allow for efficiencies in transportation of ammonia such as pipelines, ships, or trucks, which would then influence the strategic decisions of which ones are economic in terms of cost advantages. Future studies for optimization are needed, along with the analysis for cost of pipeline, salt caverns for storage, and solar and wind resources. Infrastructures ranging from electrolysers to storage and transport facilities are key towards the deployment of green hydrogen at scale. Coordination efforts are needed to early identify the required infrastructures and not miss the opportunity to be an early market entrant.
Moreover, Namibia could face challenges in terms of transportation costs since hydrogen is very expensive to transport by truck or ship especially that specific temperature needs to be maintained, hence, producing green ammonia or methanol is an alternative solution to export green hydrogen at lower cost. There is extensive consideration of policy development in the sector to support and guide the green hydrogen project, while at the same time serving as complementary to the existing policies such as the Energy Policy and the Renewable Energy Policy. Therefore, more comprehensive studies and drafting of new policy for green hydrogen need to commence with the support of all stakeholders. Key to this will be the development of Namibia’s Green Hydrogen Strategy that will outline the goals and aspirations whilst simultaneously defining the necessary policy and regulation to enable delivery of this green economy.
Energy Compact Descriptions
Namibia minimum size to have competitive price to enter the ammonia export market is 0.5 Mt of ammonia production per annum (commercial-scale ammonia plant), which would require power supply in excess of a 1 GW investment in solar and wind. Indeed, 1 GW electrolyzer capacity with 50% capacity factor would deliver 87,600 t of hydrogen, enough to make 496,400 t of ammonia. With 100% capacity factor firm electricity, ~1 Mt of ammonia could be produced.
Preliminary estimates of production costs of green hydrogen and ammonia in near term in three locations in Namibia show that the country could produce both hydrogen and ammonia at highly competitive prices. Levelized renewable electricity costs in these locations resulted in 28.7 USD/MWh for solar PV, and ranges from 28.8-46.6 USD/MWh for wind. With assumptions targeting large scale projects in the near term, the preliminary analysis finds H2 production costs of 1.94-2.27 USD/kg. Desalination of water at 1 USD/m3 adds 0.01 USD/kg H2, which represents 0.5% to H2 production cost. Oxygen sales may provide additional revenues. For the production of ammonia, also assuming commercial scale plants in the near term, the analysis finds production costs in the range of 437-548 USD/t NH3, depending mostly on the assumption for flexibility of the Haber-Bosch reactor (40%, 80%), and the type of hydrogen storage available (steel tanks or underground), where the possibility to use underground cavern storage of hydrogen could further reduce the cost of producing green ammonia.
Energy Compact Indicators
Namibia has already embarked on calling for Requests for Proposals (RFPs) for the commencement of detailed green hydrogen production feasibilities. It is envisaged that these feasibilities will commence early in 2022 with completion at the end of 2024.
Expected financial close, design and tendering would result in commencement of construction of renewable energy and green hydrogen production plants in 2025. This will enable green hydrogen / Ammonia exports from Namibia to become a reality towards the end of 2027 / beginning of 2028.
In summary we are committed to the following targets:
- A Green Hydrogen strategy by Q3 – 2022
- Feasibility for GW scale Green Hydrogen project start by Q1 – 2022
- 400 +MW of electrolyzer capacity by 2025
- 1GW+ of electrolyzer capacity by 2030
“The capital cost of the hydrogen generation plant and Fuel Cell system is very high making P2P & energy storage solution unviable. For the overall system to become viable, ramping up of manufacturing capability and setting up of manufacturing facilities in India needs to be incentivized. The overall round-trip efficiency also needs to be improved by way of technical improvements to reduce the requirement of renewable power“