Global warming and climate change are not merely the concerns of a few lobby groups, but rather serious threats to humanity’s livelihood, recognised by 196 countries, including Namibia.
It is, therefore, regrettable to see Rowland Brown’s article, downplaying the impact this global crisis has on Namibians, suggesting that it may be a lobby-driven hoax to push for renewable energy investments.
Mocking the plight of Namibians, especially in a country that is 90% arid and identified as one of the most vulnerable to climate change, during a severe drought that is devastating the most vulnerable among us is most unfortunate.
The government has a real responsibility to consider and deal with the effects of climate change and its debilitating impact on our citizens and those of the broader global community.
I write this piece from Hamburg, as Namibia and Germany have just returned from New York, having led the world on a precarious pathway to establish a new Pact for the Future.
A new and redesigned multilateralism partnership with climate change, equitable distribution of resources and a more sustainable consumption of our natural resources are at the core of this new endeavour, which is to replace the current United Nations Sustainable Development Goals (SDGs) by 2030.
While it saddens us to see privileged analysts cast rocks at the poor populace from their glass castles, it is indeed a feature of our democracy, one which we hold dear and is underpinned with the freest press in Africa.
However, it is incumbent upon us, as public servants, to provide some basic tenets of how this government has truly pursued social-economic transformation as it relates to green industrialisation, with green hydrogen as a key catalyst for such an outcome.
Private sector-driven
From the onset, government emphasised that a private sector-led economic recovery was key. Green hydrogen was not labelled as the only game in town to help Namibia emerge from the debilitating pandemic.
It was rather termed as one of the key strategic bets in the second Harambee Prosperity Plan, together with Namibia’s emerging oil and gas industry and opportunities in the mining sector, where Namibia is home to several critical raw materials required in the energy transition.
With a relatively small investment in time and money, predominantly financed by donor funding, exploring the economic viability of this opportunity may have an outsized and asymmetric payoff.
At the time, Rowland Brown touted the opportunity as “pie in the sky” and a 2030 phenomenon that would not be impactful for Namibia at all.
Three years on, Namibia raised more than N$2.2 billion in grant funding, established multiple green hydrogen pilot projects, and has found Namibia elevated to the forefront of global research and development efforts, with various Namibians pursuing postgraduate and doctoral studies in this field.
Not in 2030, but in 2024! One would ask, ‘Why does this matter?’
It is critical to establish the track record of the naysayers in this space and their consistency in discrediting these efforts.
So far, Brown’s predictions have been questionable at best.
Tsau //Khaeb a ‘pristine and untouched area’
One additional argument raised by Dr Chris Brown of the Namibia Chamber of Environment (NCE) and further echoed by Rowland Brown is that the Tsau //Khaeb is a pristine and untouched national park, whose biodiversity ecosystem would be destroyed beyond repair with the establishment of green hydrogen projects.
In earlier interviews, Dr Brown stated that he thought the green hydrogen projects would impact 40% of the park.
Latest estimates from Hyphen Hydrogen Energy indicate that the project will at most have a 0.07% footprint, and is targeting to reduce this impact further, with over 90% of this impact in the least environmentally sensitive areas of the park.
Additionally, every Namibian appreciates that the park is a multi-use park – and as such, it has been the economic backbone of the Namibian economy since the early 1900s.
Excavating billions of tonnes of earth was required to mine diamonds in the same park, a process that has been crucial to the Namibian economy.
Today, more than 0.76% of the park has supported mining activities for diamonds, and currently supports mining prospecting licenses for various minerals such as rare earth elements.
Despite these activities, and with increased focus in recent years on advanced mining and environmental preservation practices, these activities have not destroyed the ecosystem of the park.
In addition to this, in 2017, Parliament passed an amendment to the Nature Conservation Ordinance, which included section 17(2)(k), which stipulated that the minister (responsible for the environment) may “establish a renewable electricity source (in the park) for the purposes of the… protection of the environment or the combating of climate change”.
The intention of the Namibian people has always been that a delicate balance needs to be struck between nature conservation and socio-economic development as is true for any project.
This is balance we are doing our best to strike in all our endeavours.
It is also rather paradoxical to me that Mr Brown and Dr Brown have received significant funding from the hydrocarbon sector.
In the case of the Namibia Chamber of Environment (NCE), funding sources appear deliberately structured to obscure their true origins, as one would discover upon reviewing NCE’s financial statements.
Additionally, Dr Brown and Mr Brown have openly lobbied for the establishment of oil and gas assets in the same park, some of which, like Kudu gas, may increase the emissions of the entire Namibian energy sector by more than 15 times, an estimated published by Cirrus Capital, Rowland Brown’s firm.
To claim that a maximum 0.07% footprint in the park – proposed to be developed to the highest international environmental standards, with extreme care taken to locate development in areas of least environmental significance, a luxury mining companies do not have, will cause irreversible damage to a 22 000 square kilometre park, more than twice the size of Qatar, is a statement that must be subjected to the ‘true/false’ test as advocated by the flamboyant analyst.
That being said, government takes any impact on our nation’s biodiversity very seriously.
Therefore, the government has commissioned a Strategic Environmental and Social Assessment (SESA) to ensure that we gather the real facts of potential developments within the park.
This study is not solely for green hydrogen developments, but also for projects supporting the emerging oil and gas industry, the five permitted wind projects, the proposed gas-to-power plant and the expansion of Lüderitz, which will need to grow to accommodate these new industries.
The SESA will help government carefully evaluate, based on facts, both the potential impacts on the natural environment and the corresponding social effects.
The economic viability of green hydrogen
Another key tenant of Rowland Brown’s warning was for government to not subsidise what he terms to be perpetual loss-making green hydrogen endeavours, a notion that betrays the lack of appreciation of what the opportunity at hand truly entails. What should be clear is that government is not building nor funding the five green hydrogen projects currently pursuing feasibility activities.
Rather, government merely provided a platform and an invitation (a right to conduct a feasibility study and in the case of one project, access to land, on a compensated basis) for private sector players to explore the technical, environmental and economic feasibility of establishing various clean molecule applications in Namibia.
Should none of these projects prove that they are feasible, the basic law of project finance dictates that they will not unlock the required equity and debt funding to proceed to implementation.
For instance, the US$8.4 billion NEOM green hydrogen project in Saudi Arabia raised US$6 billion in bank funding before it commenced construction.
Similarly, H2Green Steel in Sweden raised €6.3 billion in funding for its project, including €4.2 billion in debt.
Given the absolute size of the government, there is no subsidy it could provide to make an unfeasible project feasible, nor has the government ever said it is seeking to provide financial subsidies to any project in Namibia.
Suggesting so is factually incorrect.
It is truly unfortunate to see a fellow Namibian attempting to diminish or stifle the economic opportunities available to others.
Surely, we can allow these feasibility studies to proceed peacefully and review the results together, with an objective and united perspective as one community.
Green hydrogen vs green industrialisation
Rowland Brown spent a lot of time talking about the volumetric energy density of hydrogen, compared to alternative fuels.
Yet, he conveniently overlooked the fact that none of the existing export-focused business cases we have seen so far are looking to export hydrogen as a fuel – a major oversight or a deliberate ploy to confuse the issue at hand?
Most of the private sector developed cases are looking to export green hydrogen in the form of green ammonia or use hydrogen to add value to minerals and or other resources in the country and export green products.
By way of example, ammonia is an existing 200 million tonne per annum market, projected to grow to over 600 million tonnes by 2050, as ammonia is used to decarbonise hard-to-abate sectors, such as shipping.
Additionally, considering this, the cost of green steel, compared to the total components of a vehicle, means that a 25% increase in the cost of steel (green steel) results in a 0.5% to 1% increase in the final cost price of the vehicle to the end consumer.
H2 Green Steel, a green steal project in Sweden, has attracted equity players, which include auto manufacturers like Mercedes Benz.
Namibia’s own HyIron project has had some engagements with various auto manufacturers, such as Toyota.
In our review of emerging policies looking to stimulate the demand and supply of green hydrogen and the potential customers for Namibia’s green hydrogen, we are encouraged by the progress being made, despite the complexities.
It would be remiss of me not to point out that it is not the government’s responsibility to develop individual business cases for each of the green hydrogen projects in Namibia.
Rather, the government’s role is to review these business cases, assess their viability once completed, and consider how commercially viable projects can be supported and integrated into Namibia’s broader economic growth and SDGs.
Should a private sector player say they would be willing to produce pink hydrogen (hydrogen made with nuclear energy), their plan would be considered for viability the same as any other endeavour in Namibia.
For those who are truly interested in studying some of the new industries that could emerge in Namibia and their potential techno-economic viability, I would encourage you to download the Localising Green Industries in Namibia paper from the gh2namibia.com website.
As we depart Hamburg and head to Berlin, we bring home some insightful news.
The chancellor of Germany, various German state secretaries and other high-ranking members of government reconfirmed their commitments to pursue a climate-neutral economy and their commitment to help Namibia establish competitive clean industries that capitalise on Namibia’s natural resource advantage. Angola, for example, just announced that it will develop a green hydrogen project using their abundant hydroelectricity.
As a green hydrogen council chair, travelling the lengths of the world and living and breathing this industry daily from conception in 2021 to where we stand today, I appreciate that in this instance, the government may have a better appreciation of the prospects of this emerging industry than some local analysts.
It is, thus, with a heavy responsibility that we consider it our duty to try and educate our citizens about the opportunities that relate to green Industrialisation.
This is indeed a complex new industry, and these projects are not easy to realise, but they hold transformational opportunities for many natural and corporate citizens of our beloved country. Analysts seeking to entertain their clients would do better to collaborate with the government in conducting informative, in-depth research on the real challenges in this sector. It is through addressing these obstacles together as a united people that we can unlock meaningful, transformational opportunities for our nation.
I, therefore, invite Mr and Dr Brown to join hands with us in truly serving the Namibian child. Our doors are wide open.
*Obeth Kandjoze is the National Planning Commission director general and green hydrogen council chair.