A few months ago, I published an assessment of long-distance shipping of green hydrogen from Namibia to Europe, finding that the shipping cost per unit of delivered energy would be 5-7 times that of liquid natural gas, never mind the higher cost of the hydrogen itself. As a result, when Corporate Europe Observatory (CEO) and The Transnational Institute (TNI) were looking for someone to do an assessment of Europe’s hydrogen efforts in Morocco, Algeria, and Egypt, they commissioned me.
Time, research, calculations, drafting, editing, proofing, and the like followed, and now the report is live†
It was an interesting journey to get to know another slice of data about the complexities of African countries. I had looked at energy, storage, climate impacts, and electrification in perhaps 5 of the 55 countries in the massive continent, which is second only to Asia in land area and population, but I hadn’t spent significant time on the energy and economic opportunities and challenges of Morocco, Algeria, and Egypt. Now my understanding of Africa is slightly better and broader, but still deeply inadequate, of course.
Each of the countries faces its own climate and energy challenges, and manufacturing hydrogen for Europe won’t address them.
Morocco is the most advanced of the countries in terms of renewables and electrification. Pre-COVID I spoke with a then peripatetic serial entrepreneur who had just stepped off of the high-speed electric train that runs from Tangier through Casablanca, its current 323 km of high-speed rail, and part of its planned 1,500 km. Morocco has more wind farms and solar farms than the other two countries, and the King and government are focused on transforming and decarbonizing their economy.
Like the other two countries, however, the country’s agricultural sector is highly reliant on gray ammonia, mostly imported. Gray ammonia, of course is made from gray hydrogen made from natural gas without capturing the resultant 10x the mass of CO2, and of course without doing anything about the upstream methane emissions. When applied, ammonia decomposes into various things, including NOx with global warming potentials 265 times those of CO2. Making green hydrogen and shipping it to Europe in any form before decarbonizing their local fertilizer use makes little sense.
Morocco, despite its green efforts, still generates the majority of its electricity from coal, 27 TWh a year. Every TWh comes with a megaton of CO2, so renewable electricity would be much better used decarbonizing its grid before being used to make hydrogen and hydrogen by products for Europe.
Algeria has different challenges. 14.39% of its GDP is from fossil fuels, mostly from exporting natural gas to Europe. Further, virtually all of its electricity is generated from natural gas. While the temptation to believe that exporting green hydrogen through the existing Maghreb-Europe Pipeline instead of natural gas is an economic winner, the numbers belie it. There’s also a blue hydrogen project being considered, with the significant problems that mode has, including methane emissions, low-efficiency carbon capture, and greater expense.
Blue or green hydrogen will be much more expensive per unit of energy than natural gas, from 5-11 times as expensive. And then upgrading and using the pipeline would likely triple costs of hydrogen transmission as well. Is Europe interested in paying vastly more for energy than it is even with the very high current natural gas prices? unlikely. And blending hydrogen into the pipeline will cost more, deliver less energy by volume, and only reduce CO2 emissions when used by 7%.
It’s deeply unlikely that blue or green hydrogen from Algeria will replace their oil rent. It’s in a challenging economic position, and it has a big gray ammonia fertilizer problem as well.
Egypt is bigger than the other countries, but shares concerns. It is using a lot of gray ammonia-based fertilizer that needs to be decarbonized, and 90% of its electricity is generated by burning gas and oil. Fossil fuels are a much smaller percentage of its GDP, but it’s still sufficient that it’s a concern. A greater focus in Egypt is in manufacturing synthetic shipping fuels for export near the Suez Canal. Once again, exporting green hydrogen and byproducts does not decarbonize Egypt.
Many European organizations and companies are trying to decarbonize Europe at Northern Africa’s expense.
There is a clear alternative to all of this, of course. MEDGRID is a proposed network of transmission lines linking Europe to Northern Africa, expanding on the ones connecting Morocco to Spain and the ones crossing the Bosphorus Strait. HVDC loses 3.5% less energy per 1,000 km of transmission, and none of the proposed pathways are 1,000 km in length when crossing the Mediterranean.
Bridging the Mediterranean with high-efficiency electricity transmission that could bring North Sea offshore wind and Scandinavian hydro south, and desert solar and wind energy north could decarbonize Europe and Northern Africa, providing inexpensive energy for modern economies across the region.
Europe would have more electricity to use at the point of industrial hydrogen demand in those countries for the purposes it’s fit for, mostly manufacturing ammonia-based fertilizers. Similarly, it could have more electricity for electric steel minimills to scrap its fossil fuel infrastructure in, something I consider a much bigger source of new steel than green hydrogen reduction of iron ore in the next few decades.
Europe has had a long run of hydrogen hype, pressured by the fossil fuel giants and economies that don’t want to see their natural gas reserves become stranded assets, and as a result is pushing the string of blue hydrogen up hill. They are pressuring to replace petroleum derivatives with blue hydrogen and derivatives in heating, energy for industry and transportation. REPowerEU is being rethought in recent months as natural gas prices spike, leading to the clear realization that there is no value in relying on blue hydrogen.
Some signals coming out of Brussels indicate that green hydrogen is being focused on the parts of the hydrogen ladder where it actually makes sense, current industrial demand that will not be going away, instead of being considered a replacement for fossil fuels. With luck, those signals will not be swamped with lobbying dollars for oil and gas majors and their semi-captive governments, and deep electrification of all energy will be the path forward for the hundreds of millions of residents and many countries of Europe.
If instead Europe continues down the path of making hydrogen a mainstay of heat and transportation, it will invest in highly inefficient and ineffective infrastructure, substantially delay actual climate action, and pressure Morocco, Algeria, and Egypt to waste time and money that could be better spent.
The governmental and business leaders of Morocco, Algeria, and Egypt have challenging decisions and a careful balancing act to follow. They have the opportunity to take advantage of Europe’s inappropriate fixation on hydrogen, knowing it won’t last for more than a few years, to gain significant investment in renewables, grid infrastructure, and electrolysis that will benefit them. There are definite signs that many of them know that’s the game that they are playing.
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