Government’s Green Hydrogen Stake

The Government wants to fund its 24% stake in green hydrogen with funds obtained from oil and gas finds, according to Namibia’s Green Hydrogen Commissioner, James Mnyupe.

Mnyupe set out this approach at last month’s South African Green Hydrogen Summit held in Cape Town.

Many commentators are sceptical about this being the way to go, and are rather calling for the feasibility study on the much-mooted project to be concluded.

Others feel the debate surrounding the energy transition smacks of a lack of transparency and that broad-based consultations are imperative to provide a mandate for such a decision.

I personally posit that green hydrogen economics should be left to market forces and that the Namibian government has to desist from acquiring a stake in this experimental project.

Frankly, taking oil and gas dividends to fund the government’s shareholding is ill advised because it is risky.

The onus to prove the feasibility of the project should be the responsibility of the project proponents and not the government.
Therefore, those championing the project should, by all means, prove that the idea is environmentally, economically, financially, and technically feasible.

This means that the sponsors of the project should present an analysis of the cost benefits to be derived in terms of employment creation, tax contributions, dividend payments, and multiplier spillovers for the economy.

RISK AND ‘HYPE’

Policymakers are cautioned not to exercise their prerogative to invest billions in acquiring a stake in a venture which, so far, appears based on quasi and pseudo rationale, unreliable and unrealistic in terms of unconfirmed claims of being able to replace conventional energy generation methods which have been viable in generating electricity and propelling combustion engines.
Green hydrogen remains an ideal which has yet to prove that it has the energy generation capacities to supersede gas and oil capacities.

The government wants a stake in Hyphen Hydrogen Energy, which was specifically formed to develop green hydrogen products in Namibia.

However, such a move remains risky. There is simply too much hype at this juncture.

If there is no money to implement an energy transition, then Namibia’s taxpayers should not be dragged into being guarantors of ambitious, technically unfeasible undertakings.

The focus should rather be to capitalise on oil and gas returns to use their dividends to fund the country’s sustainable development goals and welfare system architecture.

• Ben Uugwanga is the founder and manager of Capstone Consultancy based at Walvis Bay. He is also a community activist