(Annual offtake numbers in the second paragraph have been corrected)
Namibia expects to sign the implementation agreement for its $10 billion green hydrogen project in the second quarter of 2023 and commence feasibility studies, a senior official speaking at the ongoing Africa Energy Indaba 2023 summit said.
Last month, the project promoter, Hyphen Hydrogen Energy, signed two memorandums of understanding (MOUs) with a major chemical company, name withheld, and South Korean hydrogen producer Approtium for a total annual offtake of up to 500,000 tonnes and 250,000 tonnes a year respectively.
At full development, the project will produce 300,000 metric tonnes of green hydrogen annually from 5-6 gigawatts (GW) of renewables and 3GW electrolyser capacity.
Frans Kalenga, Senior Manager, Sustainable Energies, NAMCOR, said six green hydrogen projects are underway in Namibia.
Providing an update on each one of them, he said: "The HDF (Hydrogene de France) Energy project is at an advanced stage and is looking to get an offtake power purchase agreement and a generation license."
HDF is building an 85-megawatt (MW) solar power plant and a green hydrogen production unit in Swakopmund along the Namibian coast and has secured finance from the European Investment Bank at COP27.
In August 2022, Zawya Projects reported that four German-funded pilots worth €30 million for hydrogen dual fuel locomotives, refuelling stations, and agriculture and port applications are underway in Namibia.
Kalenga said the port decarbonisation project is going through the pre-contractual agreement phase.
"We are yet to conclude the negotiations and start with the pre-contractual process for the hydrogen dual-fuel locomotive pilot," he disclosed.
He continued: "The Cleanergy hydrogen refuelling station pilot is breaking ground this month, but the environmental impact assessment is still pending. The 1.5 GW green hydrogen project in Daures constituency is testing the viability of hydrogen being converted to ammonia to be used domestically."
He said Namibia is swiftly moving towards setting up an implementation office to provide a conducive environment for investors. "We are looking forward to the hyphen project because that is a key to unlocking our other land parcels."
Kalenga said stakeholder engagements to frame a Synthetic Fuels Act have already commenced, and the details are expected to be finalised by the second quarter of this year.
"The Act will spell out details regarding incentives, corporate tax, royalty, and competitive advantages with other jurisdictions, etc."
Carlo McLeod, Deputy Director, Compliance, Regulations and Economics, Ministry of Mines and Energy, said Namibia's local content policy draft is ready.
"We don't want to depend on taxes and royalties but gain more value from backwards, forwards, and sideways integration. The policy will spell out obligations that companies must meet regarding investments, value creation, skill creation, and knowledge transfer," he said.
Benedict Libanda, CEO of Environmental Investment Fund, said 30 percent of the procurement would be reserved for local industries.
Power sector developments
Kandali Iyambo, Executive Modified Single Buyer, NamPower, said Namibia is working on substituting power imports with local generation.
"We import about 180 MW from Zambia, 80 MW from Zimbabwe, and 100 MW from South Africa. Our import level varies from 50, 60, and sometimes up to 70 per cent depending on the output from the Ruacana hydropower plant".
"We have 214 MW of wind and solar power projects in the pipeline that are anticipated to be commissioned by 2025-2026. We're looking at a number of projects powered with heavy fuel oil (HFO) or gas for baseload electricity supply to be developed with IPPs and some by the state."
Pinehas Mutota, Acting CEO of the Electricity Control Board, said Namibia reformed the electricity market to allow private sector participants like mines and large power users to buy directly from IPPs and permitted exports.
"We have issued export licenses for 125 MW which has now increased to about 300," he said.
"We've introduced the modified single buyer market rules in terms of how the trading will take place….because there is bilateral trading, wheeling framework and also a balancing framework."
(Writing by Sowmya Sundar; Editing by Anoop Menon)