Africa should prioritise expanding electricity access and developing its industrial base before committing heavily to green hydrogen exports, according to a new study examining the continent’s renewable hydrogen potential.
The study, titled The Prospect and Future of Green Hydrogen in the Continent of Africa, published in the journal Sustainability, assesses the opportunities, costs and challenges facing the development of green hydrogen across the continent. It argues that directing renewable energy towards domestic electricity needs and industrial growth could deliver greater socioeconomic benefits than focusing primarily on export markets.
The findings come as announced green hydrogen investments across 16 African countries reach approximately US$293 billion. However, most projects remain at very early or emerging development stages, with few having reached a final investment decision.
Green hydrogen, produced using renewable electricity to split water through electrolysis, is considered a potential solution for reducing emissions in industries such as fertiliser production, steelmaking and heavy transport.
High production costs and project uncertainty
Africa’s solar and wind resources have attracted significant interest from international developers, but the study highlights substantial differences in production costs depending on location.
Green hydrogen produced using solar power is estimated to cost between US$6 and US$10 per kilogram. The lowest costs are generally associated with desert regions, although water scarcity in these areas could increase production expenses. Mauritania and Somalia are identified as exceptions to the broader pattern of desert-region costs.
Wind-powered production costs vary even more widely. The lowest estimated levelised cost is approximately US$5.50 per kilogram in areas near the Arabian Sea, Red Sea and Horn of Africa, where wind capacity factors exceed 40%.
In parts of Southern Africa and central Eastern Africa, where wind capacity factors are around 15%, production costs could range from US$8 to US$26 per kilogram.
Despite the scale of announced investment, the project pipeline remains immature. The study identifies 11 projects at very early stages, four at emerging stages and one at the exploratory stage. Large-scale developments have also lagged behind the global rate at which projects reach final investment decisions.
The researchers caution policymakers against making substantial commitments to projects designed exclusively for exports before their economic benefits and commercial viability are established.
Electricity access remains Africa’s bigger priority
The study places the hydrogen opportunity against Africa’s persistent electricity access challenge. More than 640 million people on the continent lack electricity, while overall access stands at just above 40%, the lowest regional rate globally.
Electricity consumption per person in sub-Saharan Africa, excluding South Africa, is estimated at only 180 kilowatt-hours annually. This compares with approximately 13,000 kWh in the United States and 6,500 kWh in Europe.
Renewable energy currently accounts for around 20% of Africa’s electricity mix, comprising approximately 15% hydropower and 5% solar, wind and other renewable sources.
With the continent’s population projected to reach 2.5 billion by 2050, the researchers argue that expanding reliable electricity access through renewable energy could support economic development, industrialisation and improved living standards.
The study therefore recommends developing green hydrogen initially for domestic and regional industrial applications rather than prioritising exports.
Six-stage roadmap towards 2060
To guide development, the researchers propose a six-stage roadmap covering the period from 2026 to 2060. It considers technology readiness, production costs, market opportunities, resource availability and infrastructure requirements.
The roadmap envisages building an African green and low-carbon hydrogen industry that initially serves domestic demand, with exports becoming a possibility as the market and supporting infrastructure mature.
In the short term, the study recommends concentrating on a limited number of commercially viable pilot projects capable of reaching final investment decisions. It also calls for unrealistic production targets to be reassessed and adjusted to reflect market conditions.
The authors stress that establishing green hydrogen as a mainstream commodity will take decades rather than years.
They also acknowledge uncertainties in their cost modelling, which uses annual averages rather than hourly simulations and therefore does not fully account for daily and seasonal changes in renewable electricity generation. Future hydrogen demand, financing conditions, carbon pricing, electrolyser technology and competing decarbonisation options could also influence the sector’s development.
For Africa, the central challenge will be ensuring that the emerging hydrogen industry strengthens domestic energy security and industrial capacity while creating commercially sustainable opportunities for future exports.