Cleantech Market Intelligence
South Africa’s Fuel Cell Future
The first part of this blog on South Africa looked at the country’s changing attitude to energy and the move to diversify its portfolio of energy generation technologies. Part 2 looks at the South African economy and the government’s drive to expand and diversify.
According to the South African government it has three key economic drivers: the processing and use of domestic raw materials for the benefit of the national economy; the movement of the economy toward knowledge-based industries; and Black Economic Empowerment (BEE), whereby previously disadvantaged groups are provided with economic opportunities. The government is aiming for a 6% annual growth in GDP from these shifts.
Looking at the current economic situation in South Africa, it’s clear that the biggest assets are the country’s abundance of raw materials, including 80% of the world’s precious group metals (platinum, palladium, rhodium, ruthenium, iridium and osmium) plus chromium, in just one vast deposit known as the Bushveld Complex. These resources, along with South Africa’s large deposits of gold and coal, provide the country’s main source of employment and 8% of its annual GDP.
Developing an Indigenous South African Fuel Cell Industry
Beneficiation, a term derived from the processing of raw ore in the mining industry, refers to the addition of value to an economy from the processing and manufacture of goods from local resources. This is going to be a key to the South African economy. For this to happen, precious group metals, primarily platinum, will increasingly be processed and used in some form of manufacturing locally.
As an emerging market for platinum, fuel cell technology will have a large role to play in this effort. In 2007 the South African government produced its National Hydrogen and Fuel Cells Technologies Research, Development and Innovation Strategy” (not publicly available online), which centered around three core themes: fuel cell catalysis, systems analysis and technology validation and hydrogen infrastructure. A key target is to supply 25% of the global fuel cell market with catalysts by 2018. (For more, see the Hydrogen South Africa Web site.)
A quick note on fuel cell catalysts: fuel cells operate by separating out electron and ions at a catalyst layer on the anode and combining the ions with oxygen molecules at the cathode. The anode catalyst layer on low-temperature fuel cells is platinum-based, whilst the catalyst on the cathode can be a mixture of precious or base metals.
As Pike Research forecasts show, the fuel cell industry is predicted to reach over $150 billion by 2018. Supplying 20% of this market with fuel cell catalysts would be worth many millions of dollars annually to the South African economy.
To do this, though, the country will need to either attract the current fuel cell catalyst companies to relocate some of their manufacturing facilities to South Africa, or create companies from scratch. In reality the way forward will likely be a mixture of the two, with some companies relocating, attracted by generous labour subsidies, and some forming locally.
Over the next decade the South African economy and the growth of the fuel cell economy could become intrinsically linked. Whether this will be a good or a bad thing is debatable. What’s clear is that South Africa is a country in transition that, with the global growth of the cleantech sector, could become a major adopter and producer over the next decade. If that happens it could help seed a clean energy revolution across Africa – and that would surely be no bad thing.