Israel Johannes

The hype, act of activism towards climate change and technicality ignorance are overshadowing the fact that with the current technology at hand, green hydrogen production is not a wise investment choice. 

How did we get to this belief? What is the main agenda towards this kind of decision-making? Is this a new go-to thing when it comes to ‘green’ energy production?

The COP27 (UN’s Climate Change Conference 2022) still has the same agenda as the first held climate change conference. We have come a long way for the 27th time to tackle the issue of climate change via alternative energy sources; the global temperatures keep rising ever since the first climate change conference was held. 

Sadly, there exists little to no change in the transition from conventional energy systems to renewable energy systems. Albert Einstein defined insanity as doing the same thing over and over again expecting different results. Perhaps the world will become sane if the climate change conferences re-evaluate its goals to ensure a feasible smooth transition in energy sources rather than having oblivious goals that are just too difficult to attain.

Germany is the leading country that invested heavily in renewable systems, providing nearly 20% of its energy output. According to the world meter, in 2016 Germany produced 9.44 tons per capita of carbon dioxide emissions while Namibia only produced 1.65 tons per capita on its carbon footprint. 

Recently, Germany is dismantling some of its windmills to expand a coal mine. It is saddening to see countries like Namibia being pushed right into the corner when it comes to carbon dioxide emissions forcing us to only look at renewable energy plants which are expensive and unreliable and yet the country still imports most of the electricity. For those who are finding it hard to wrap their heads around green hydrogen, it is not too late to understand exactly what is being talked about. Here are some insights: Hydrogen, the first element on the periodic table, is regarded as an energy vector which makes it some sort of fuel. It can be produced from various sources including water. 

Water has two hydrogen atoms paired with one oxygen atom. To produce hydrogen by breaking down the water molecules one must use a tremendous amount of energy to break these bonds. Green hydrogen production uses renewable energy systems as the energy supplier (usually wind energy and solar energy) on the fuel cells.

A hydrogen fuel cell was invented in the 1800s and the first hydrogen-powered vehicle was produced by General Motors in the early 1960s, meaning this type of technology has been around for quite a while. Most global energy giants are still sceptical about investing in hydrogen production due to its economical downfall. It is extremely expensive to produce, store and transport the hydrogen from water. To make it worse, it is even more expensive if the energy sources are renewable. 

One thing about the product, only the market defines its success. Producing hydrogen is not only expensive but there is very little market for it. “Projected market growth” will never do you justice when it comes to a risky investment like this, which has a little reward in the end. The government of Namibia is investing billions of dollars into a project that has little chance of success. Having the reasoning of green hydrogen production success pegged on the “projected” drop in prices of renewable energy and electrolysers in fuel cells is not a wise business idea. 

The challenges you will face will burn all your cash and bring your business towards the cusp of an abyss.

If our main energy goal is a smooth transition, investments in natural gas projects (which has a relatively low carbon emission) are much more feasible. Most European countries depend on natural gas because of the positive impacts it has on their economies, prices, and reliability. 

The green hydrogen production project in Namibia is set for failure due to the small market demand, prices, unreliability (production will only occur when it is windy, sunny or a combination of both), transportation challenges and storage. With all that, it is never too late for the green hydrogen production investor to re-evaluate the feasibility of such a project and make the right business decision.