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Germany eyes DRC hydrogen project

Scheme is at very early stage and depends on a long-delayed mega-dam for which funding is uncertain

Spanish and Chinese firms have created a consortium to develop the Democratic Republic of the Congo’s (DRC) much-maligned Inga III hydroelectric project, and the Kinshasa government now wants to add a hydrogen plant to the sprawling complex on the banks of the Congo River.

In August, representatives from German natural gas company VNG and hydroelectric specialists Andritz and Voith travelled to the DRC to discuss the hydrogen project and met with President Felix Tshisekedi.

“Today, it is a rough idea. We have brought some people together who are thinking about and discussing it,” says Oliver Hill, VNG’s director of corporate development, who was part of the delegation and was told the project could produce 2mn t/yr of hydrogen.

The proposed plant site is close to Matadi, the last navigable port upstream on the Congo and about 65km southwest of Inga. Hill visited the proposed site.

“If somebody was to build the plant, then there is the question of how to bring the hydrogen to Europe” Hill, VNG

“It sounds feasible… The next step would be some feasibility studies in order to check the environmental affairs and the technical possibilities. If somebody was to build the plant, then there is the question of how to bring the hydrogen to Europe.”

But even conducting the feasibility studies could be problematic. “It also needs some [financial] support from the government or the EU, because these studies would be relatively expensive, and we would not invest a couple of million,” Hill tells Petroleum Economist. “Our position could become one of an offtaker in case the project happens.”

VNG, which specialises in natural gas trading, transport and storage, wants to diversify into green hydrogen following Germany’s push to reduce its use of fossil fuels.

In June, Germany approved a €9bn ($10.6bn) hydrogen strategy as part of its target to generate 100pc of its electricity from renewable sources by 2050. The country aims to have 5GW of installed hydrogen capacity by 2030. While solar and wind generation have accounted for 42pc of Germany's energy mix so far this year, according to Hamburg-based business intelligence company Statista, the country will need to import renewable energy resources.

Local difficulties

The DRC could prove a difficult partner. The Inga I and Inga II dams are among 40 hydropower projects on the Congo River, the world’s second-largest by volume. Built in the 1970s and 1980s, the dams have capacities of 354MW and 1,424MW respectively but operate at far below that, while Inga III has faced prolonged delays that included the World Bank suspending financing in 2016.

The US Congress cited Congo’s refurbishment of Inga I and II in passing a law in 2014 forbidding any loan or grant to support the construction of hydroelectric dams, according to a 2019 paper by Dutch academics. By 2016, the work was over a decade late and had cost $1bn—five times the original estimate.

Nevertheless, a consortium of six Chinese firms and Spain’s AEE Power Holdings has agreed to develop the $14bn, 11,050 MW Inga III, although Spanish infrastructure firm ACS has withdrawn. The Chinese players include Three Gorges Corp and collectively hold 75pc of the project, which is slated to be built in three stages, with the first having a generation capacity of 4,800MW.

South Africa has promised to buy 2,500MW of electricity capacity from phase 1, but the technical details of building the transmission lines to South Africa via Zambia, Zimbabwe and Botswana are unresolved.

11,050MW – Size of Inga III hydroelectric plant on which the hydrogen plant depends

“The necessary agreements must be concluded as soon as possible if the hydro option from Grand Inga is to materialise,” states South Africa’s 2019 Integrated Resources Plan, which envisages receiving electricity from Inga III from 2030 onwards.

The hydrogen power plant, therefore, suggests the DRC is looking for other buyers should South Africa falter, as seems increasingly likely. South African utility Eskom is essentially bankrupt, while local media estimate the cost of building the transmission lines and supporting infrastructure at around $4bn.

The hydrogen plant depends on Inga III being built and will also require a new deepwater harbour at Matadi.

“What is the cost structure for Inga III? What does this mean for the hydrogen [plant]? What are the transportation costs to Europe?” asks Hill. “These are open questions and need to be clarified in order to decide whether it make sense to go for the Congo project or not. We do not have answers at the moment.”

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