Power-to-X Economy: Green e-hydrogen, e-fuels, e-chemicals, and e-materials opportunities in Africa

Abstract

Africa has enormous potential to produce low-cost e-fuels, e-chemicals and e-materials required for complete defossilisation using its abundant renewable resources, widely distributed across the continent. This research builds on techno-economic investigations using the LUT Energy System Transition Model and related tools to assess the power-to-X potential in Africa, for meeting the local demand and exploring the export potential of power-to-products applications. In this context, we analysed the economic viability of exporting green e-fuel, e-chemicals and e-materials from Africa to Europe. We also present the core elements of the Power-to-X Economy, i.e., renewable electricity and hydrogen. The results show that hydrogen will likely not be traded simply due to high transport costs. However, there is an opportunity for African countries to export e-ammonia, e-methanol, e-kerosene jet fuel, e-methane, e-steel products, and e-plastic to Europe at low cost. The results show that Africa's low-cost power-to-X products backed by low-cost renewable electricity, mainly supplied by solar photovoltaics, is the basis for Africa's vibrant export business opportunities. Therefore, the Power-to-X Economy could more appropriately be called a Solar-to-X Economy for Africa. The Power-to-X Economy will foster socio-economic growth in the region, including new industrial opportunities, new investment portfolios, boost income and stimulate local technical know-how, thereby delivering a people-driven energy economy. Research on the topic in Africa is limited and at a nascent stage. Thus, more studies are required in future to guide investment decisions and cater to policy decisions in achieving carbon neutrality with e-fuels, e-chemicals, and e-materials.