Chemical producer Hive Hydrogen wants to work with the Nelson Mandela Bay municipality in a power-banking arrangement that has the potential to end load-shedding in 2026 and save the metro R800m a year.
Hive Hydrogen will produce green ammonia for export at Coega’s industrial development zone (IDZ).
The site for the R73bn plant was unveiled in January.
In terms of the proposed arrangement, the company will provide free electricity to the city during the day which would then be returned to it at night when its plant is not operational.
The arrangement was given the go-ahead by the energy and electricity committee in November with further approval by the mayoral committee last week.
However, it will have to get final approval from the council, scheduled to sit on Wednesday.
If it happens, a memorandum of understanding will be signed between the metro and Hive Hydrogen.
The first phase of Hive Hydrogen’s green ammonia project is expected to start in 2025 and be fully operational by the end of 2026.
The company hopes to make the city the renewable energy capital of SA.
A report by energy and electricity executive director Luvuyo Magalela states that the city has an electricity distribution licence in place for the location of the plant.
“For this reason, Hive Hydrogen would like to enter into a banking agreement with the municipality to provide power that cannot be utilised by the hydrogen and ammonia plants to the municipality during the daytime, plus additional power during the weekday peak periods.
“In return, the municipality will provide off-peak power to the hydrogen and ammonia production plants on a one-to-one ratio,” the report says.
Hive Hydrogen will provide 300MW to the metro during peak periods on weekdays, on average for five hours a day.
This equates to 390,000MW/h a year.
Excess renewable power during the day will be provided to the metro, totalling 370,000MW/h a year.
Off-peak power to the Hive Hydrogen plant will be 760,000MW/h a year.
Speaking after the committee meetings, electricity and energy political head Lance Grootboom said the project was a first for a metro in SA and could place the city ahead in becoming a green energy hub.
“We will become the leading municipality in green energy distribution, helping the country meet international carbon dioxide reduction goals while greatly reducing the metro’s reliance on Eskom,” he said.
Grootboom said his vision to provide uninterrupted electricity supply to residents, businesses and industries in the metro was fast becoming a reality.
“With 300MW of energy pumped into our grid, especially during peak times in the morning and evening, we will be able to halt load-shedding in the metro which will in turn boost industry and manufacturing, particularly in the Coega IDZ.
“The partnership with Hive Hydrogen will enable a reduction in electricity tariffs for residents and business, improving the directorate and the municipality’s collection rate, improving revenue and ensuring a quicker path to restoring the metro’s financial viability.”
He said the injection of green energy into the grid at no charge would allow the department to ramp up maintenance and protection of infrastructure while partnering with other independent power suppliers.
The total power requirement for the plant will be 1,350 megawatts and, according to the report, all the power required for the production and storage of the ammonia must be sourced from renewable energy generation plants to secure a green ammonia classification.
“The production of ammonia is aimed to be a catalyst for economic development for the Eastern Cape and provide job opportunities to thousands of people.
“The project involves the provision of a 1,200 megawatt electrolyser [an apparatus that produces hydrogen through a chemical process] to convert fresh water to hydrogen, plus a further beneficiation plan to convert the hydrogen into anhydrous and then ammonia for export.”
Green ammonia is a cleaner alternative to coal, with applications in agriculture, mining and industrial chemicals.
On completion, the plant will be the world’s biggest green ammonia plant, churning out 780,000 tonnes a year.
Nelson Mandela Bay Business Chamber chief executive Denise van Huyssteen said the company was a critical contributor towards advancing the climate-change strategy for the municipality, which among other areas promoted a green economy and the initiation of renewable energy solutions.
“With Hive Hydrogen as an anchor, we have no doubt that this will expand and unlock our metro’s potential to become a key renewable energy hub on the continent as an exporter of green ammonia and related products to major markets like the Far East, Europe and the United States.”
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