Can Africa solve Germany’s energy problems?

Oberkrämer, 01/07/2022: The magazine for hydrogen and fuel cells “Hzwei” published a guest article by Stefan Liebing in its July issue. The core question of the article is whether and to what extent Africa can support Germany in its energy issues and why our neighbouring continent is still underestimated.

While Economics Minister Robert Habeck is travelling to Qatar and Norway to make Germany less dependent on Russian energy supplies, representatives of the Italian government are heading to Algeria, Angola and the Congo. Africa is still underestimated by the German government, not only as a supplier of natural gas, but also as a partner for new hydrogen projects.

According to experts, Germany will have to import energy in the long run. Currently, the import share is still 60%, mainly fossil fuels. For the switch to the more promising alternative LNG to work, terminals still need to be built. Since banks will only provide the tens of billions of euros needed to build these terminals if 80-90% of the gas is sold in long-term contracts before construction begins, only a small amount remains that can be traded on the spot market in the short term.

A similar problem exists with the long-term and stable procurement of green energy: new hydrogen projects will only be built if buyers sign corresponding contracts. The currently discussed import terminals for green methanol or ammonia will stand empty if there is no consistent procurement strategy.

An independent external hydrogen policy could help here, in which the selection of partner countries also plays an important role. The production of hydrogen from renewable energies is only economical, even in the current high price times of oil and gas, if the green electricity is generated for under 2-3 cents per kilowatt hour. Since battery storage is still far too expensive, it is necessary to focus on countries with favourable solar and wind conditions. In addition, there is the availability of sufficient water for the electrolysis process and access to export infrastructure – meaning the location by the sea and the existence of necessary loading terminals.

According to studies, West Africa alone would be sufficient to meet the world’s demand for hydrogen. However, countries that already meet the technical conditions are, for example, Egypt, Algeria, Morocco, Mauritania, Namibia and South Africa. In addition to the technical and economic criteria, questions of investment security and the financing of projects also play a role, for which Africa continues to have a rather poor reputation. Nevertheless, there are already some German companies investing in promising hydrogen projects in Africa.

The distinctive feature of Africa is that economic projects are much more political than in the more developed states in Europe or North America, for example. Many projects are decided through the allocation of political agendas and opponents are often state-owned enterprises from other countries, supported by their governments. The German government has therefore concluded “hydrogen partnerships” with Angola, Morocco, Namibia, Nigeria, South Africa and Tunisia. Some problems are nevertheless overlooked by the federal government. For example, funding and equal opportunities in competition with foreign governments are still poor.

If it is possible to create such a close interlocking between politics and business in the joint realisation of hydrogen projects to supply Germany with green energy, then Africa, due to its positive technical conditions and geographical proximity to Germany, would have the opportunity to make a much contribution to the German energy supply than it does today. than it does today. Currently, a group of countries is emerging in Africa that, due to good solar and wind conditions, are the new energy export champions of the world, replacing many traditional replace many traditional OPEC countries.
The question however, is whether Germany is agile enough to seize this opportunity.