If re-elected, Trump likely to push back decarbonisation: Grynberg

Former Unam lecturer and economist, Roman Grynberg, said if the US vote Donald Trump back, he would almost certainly cancel the [Joe] Biden’s administration’s Inflation Reduction Act.

Biden’s Inflation Reduction Act currently provides US industry with a subsidy of US$3/kg for green hydrogen for ten years, up to a maximum of US$100 billion.

Writing in the IPPR’s Review of Namibia’s Green Hydrogen Developments, Grynberg also said Trump, who believes climate change is a hoax, could bring the international community’s commitment to decarbonization decarbonisation by 2050 to an end.

According to Grynberg, green hydrogen produced from renewable sources such as solar and wind power currently costs US$5 to US$6 per kg or up to five times the market price of gas-powered ‘grey’ or ‘black’ hydrogen.

Grynberg said there are multiple reasons why, at such prices, green hydrogen is even being considered.

In April this year, Grynberg said, five engineers from Oxford University in the UK published a peer-reviewed paper that modelled a green hydrogen project based on a facility at various locations in Namibia.

According to Grynberg, with its robust South Atlantic winds and plenty of sunshine, Lüderitz was the least expensive site for this project.

He further said the Oxford University team estimated that the cost of ammonia, a product derived from hydrogen production, is currently Euro 5.4/kg (N$107/kg).

Furthermore, he added, the most critical project by far is the Hyphen Hydrogen Energy project, based in Lüderitz, along Namibia’s south coast.

“The project is expected to be up and running by 2026/27. The expected 2030 price of green hydrogen that was estimated in the recent 2023 NamPower / Rotterdam Port joint pre-feasibility study is around Euro 3.25 (N$65).

“However, this is a pre-feasibility study, so the estimates are made with a margin of error of ± 50%.

Thus, the price estimates in the NamPower study may well be close to the estimates of the engineers from Oxford University,” said Grynberg.

Namibia authorities, on the other hand, have chosen to accept the International Energy Agency’s (IEA0 projected price of US$2.5/kg in 2030 or McKinsey’s predictions of US$1/kg (N$19/kg) in 2030.

Grynberg further said that to facilitate decarbonization and transformation of their economies away from dependence on fossil fuels, mainly from Russia, the EU has publicly supported the development of green hydrogen and the project in Namibia.

Thus, Euro 5 (N$100) is entirely plausible when the cost of grey hydrogen from fossil fuels is as low as US$ 1/kg ($N19).

The International Renewable Energy Agency (IRENA) and the consulting firm McKinsey have suggested that two main factors, the declining costs of solar and wind-generated electricity, will likely cause green hydrogen to continue falling to these levels by 2030.

He cited that The Hyphen project, according to the NamPower / Rotterdam Port pre-feasibility study, is currently estimated to cost Euro 11 billion, which is approximately the same as Namibia’s current GDP.

Hyphen is a joint venture between the South African subsidiary of the German transnational firm Enertrag (49%), a relatively large but new renewable energy producer, and Nicholas Holdings (51%), an entirely unknown entity in this field.  Even the German parent company, Enertrag, with its 800 employees and total sales of N$5 billion, is not of sufficient girth to fund the N$200 billion Hyphen project.

He said it was reported that Nicholas Holdings was trying to sell an unspecified stake in Hyphen to one of the oil and gas majors for N$3 billion.

He stated that the first and most significant technical danger is that “white” or geological hydrogen, whether black, brown, grey, blue, or green, will appear economically extractable and vital enough to compromise the economic viability of produced hydrogen.

“White hydrogen has been found in numerous locations, including Mali, Australia, Brazil, France, and the USA.

In Mali, it is estimated that there is somewhere between 46 and 250 million tons of natural hydrogen or several years of global supply at current demand.

“The Australian company Gold Hydrogen has found hydrogen in South Australia and has an estimated volume of 1.3 million tonnes,” added Grynberg.

Moreover, Australian firms expect to sell white hydrogen for US$1/kg, undermining the position of green hydrogen producers.

According to Grynberg, the US Geological Survey announced an estimated five trillion tonnes of hydrogen in the earth. While only a tiny proportion will be commercially viable, it is enough to last for hundreds of years.