Divided opinions on hydrogen
Cynics struggle to identify tangible benefits for the average NamibianThe Business School of the North-West University of South Africa yesterday conducted a consultative meeting, having invited the general public to listen to the arguments of a think tank, which discussed the topic of “Unlocking the potential of green hydrogen towards shared prosperity”.
The takeaway seems simple: Green hydrogen can generate a better future for Namibians of all walks of life, but only if several factors are managed correctly and to the benefit of the country and all of its people.
Two contrasting views were presented by Namibian economist and co-founder of Cirrus Capital Rowland Brown, and Francois van Schalkwyk who is the director responsible for Investments and New Ventures at the Namibia Investment Promotion and Development Board (NIPDB).
Having stated that he regards Namibia as generally being a “green state” in terms of its standing as a carbon emissions contributor, Brown explained why he believes that gas and oil should be considered by Namibia.
“The fact is that the gas and oil industry is established. They know what they are doing, they understand the risks and they know what it takes to develop oil sites and turn them into a production well.
“The risk is established and the development will happen at virtually no cost to Namibia. So, I would know what my choice would be.”
He made it clear that he was a staunch critic of the hype created by the hydrogen project in the south of Namibia.
“As a country, we should not rely on a single project with so many unknowns and such a long-term result as opposed to the macro-economic steps that could and should be taken to secure wealth over a much shorter term.”
Just as convincing
Dr Piet Croucamp, senior lecturer for Political Studies and International Relations at the NWU, led the sometimes lively discussion. In the process, Van Schalkwyk presented his arguments no less convincingly than Brown.
“This is not a perfect world and we certainly have a long way to go, but we approached the hydrogen production opportunity by appointing set processes and tasks to around 80 people, who focussed on these different aspects.
“Obviously, this is a green field development and we learn as we proceed, but then we also fall back on people who have done this before and have the means to do so again.”
He assessed the total value of the project for southern Namibia at Luderitz to almost N$13 billion.
Dr Seamus Duggan, Head of Tactical Intelligence EMEA, added another reality check. “Right now there is nothing yet.”
While he complimented the NIPDB’s work, he reasoned that there are still too many unknowns and rules and regulations that are not in place. “Regulations are incomplete and in other cases, they are not fully enforced, especially if we look at Environmental Impact Assessments that did not meet the legally required standard in the case of NMP and ReconAfrica,” Duggan said.
He would need to see what solutions would be presented to turn a sleepy harbour town like Lüderitz into a hub housing 17 000 or more people. “Most of these people will come from elsewhere and they need housing. The town will see a serious behavioural change.”
Apart from this, he warned entrepreneurs siting the gas development in Northern Mozambique: “It has been the largest investment in Africa for years, but there is still nothing to show for it after many years. People have gone bankrupt over it because they listened to political promises. Do not fall into that trap. Invest once the project turns into reality.”
The discussion also centred on how to manage future government earnings to ensure that everyone would benefit.
The answer seems to be the “Sovereign Wealth Fund” which the government is establishing, but it was especially Josef Sheehama, the Senior Credit Officer of Bank Windhoek, and Renaldo du Pisani, the team leader responsible for engineering and electrical at Namibian Breweries (NBL), whom both argued the macro-case for establishing an environment that allows for Small and Medium Enterprises to enter the business.
Sheehama feels that the benefits of a massive hydrogen development are likely to cause Namibia to become a producer of cheaper electricity “to the benefit of 60% of our people that are stuck in informal settlements”.
While Brown had argued that hydrogen did not pay for itself and would not do so for several years, Du Pisani was less dismissive, saying “NBL is in the process of being taken over by Heineken and it is telling that our new owners support green projects even if they do not earn a return on investment”.
Following up on that argument later, one of the attendees in a private conversation said to this reporter: “We should worry less about whether it pays right now; it will no doubt pay for itself in the long run. If the EU and Germany understand that now and are prepared to invest in hydrogen production, our country needs to grab that chance, if it comes our way.”