"The Daures Green hydrogen and PTX project as a key component of the Namibia-German partnership" - module 2 "research for a sustainable approach" (Hy4Daures)

Abstract

The Hy4Daures project accompanied the Daures Green Hydrogen Village project, a pilot for hydrogen production located in the Erongo region in Namibia. The goal was to assess the techno-economic, macroeconomic and environmental implications of large-scale hydrogen production in Namibia. The scientific research project employed a system-analytic perspective combining macroeconomic analysis, energy-system analysis and techno-economic and life-cycle assessment. Such an analysis had not been drawn out for developing countries and especially not for hydrogen production and its integration into the energy system yet. The project demonstrated, that the DGHV is a test case for how green hydrogen, ammonia, carbon and e-fuels could be embedded in Namibia's industrial development, domestic energy transition and international energy trade. Therefore, techno-economic, environmental, energy-system and macroeconomic perspectives were brought together. Key findings from this accompanying research and for system integration of Green Hydrogen Production at the Daures Green Hydrogen Village Project were:

DGHV is a scalable pilot project demonstrating a platform linking green hydrogen, ammonia, fertilizer, research infrastructure and future exports. It has the potential of creating local value added through engaging the local community through employment and agricultural production. The decisive cost lever for the LCOH is the cost of capital (WACC). For hydrogen delivered to Germany, hydrogen production contributes more to the landed costs than conversion to derivatives, transport or reconversion. Bush-encroachment biomass can provide green carbon for SAF-production, but transport of hydrogen is more expensive compared to CO2-transport. Therefore, production of carbon-based derivatives should preferably be co-located with bush harvesting. Sustainability compliance for green hydrogen with international standards requires high shares of renewable electricity either off-grid or in a decarbonised electricity grid. Harmonised GHG accounting would help interoperability across regulatory frameworks. A hydrogen strategy based on a mix of domestic use and export outperforms export-only deployment for energy system decarbonization. In comparison to a domestic use only strategy, both still yield higher overall energy system efficiency. Green hydrogen production supported financially by foreign governments improves macroeconomic outcomes for Namibia, purely domestic subsidy financing has a negative macroeconomic net effect.

A life-cycle assessment model for the environmental analysis of hydrogen production and derivatives was developed, which enables to assess the future GHG-emissions under different carbon taxonomies, such as from the Renewable Energies Directive III (RED III). To assess the integration of the DGHV into the energy system of Namibia, a new TIMES (The Integrated MARKAL-EFOM System) model was developed. It covers multiple sectors and represents key components of the energy system i.e. energy imports (Namibia is dependent on electricity imports from South Africa for example), domestic supply and electricity generation. NEWAGE Namibia, a computational equilibrium model, was further developed to assess the implications on the Namibian economy. One cornerstone of this project was the close cooperation with the University of Namibia and with the project developer Daures Green Hydrogen Village Consortium (DGHVC). This is reflected in the multiple conferences that were held together, as well as exchanges and site visits during the project meetings. To promote cooperation and the visibility of the project, presentations were held at academic institutions across Germany (Hochschule Esslingen, Dechema, Hochschule Rhein-Main), exchanges with companies in Germany and Namibia (Fichtner, Cleanergy). Importantly, with the Chamber for Industry and Commerce in Stuttgart, an excursion of small and medium sized companies to the DGHV was initiated. Discussions around the economic, social and environmental implications of projects like the DGHV were discussed with a public and scientific audience at the Tübinger "Nacht der Nachhaltigkeit" and the "Treffpunkt Transformation" at the Institute for Energy and Environmental Research (ifeu Heidelberg). A workshop on the creation of a hydrogen roadmap was held during one of the exchanges to IER together with UNAM and the Africa-Germany Green Hydrogen Research and Development Conference. Also, a conference, the PtX-conference Namibia - as a first-kind of its topic in Namibia - was held with more than 60 participants to emphasize the importance of carbon derivatives of Hydrogen using wood from encroacher bush in Namibia. Throughout the project, a seminar to disseminate skills in energy system optimization modelling was held at UNAM, which now is a repeatable format for similar projects in the future.