The true cost of entertaining analysis

Global warming and climate change are not merely the concerns of a few lobby groups but rather serious threats to humanity’s livelihood. It is therefore regrettable to see Mr Rowland Brown’s article downplaying the impact this global crisis has on Namibians, suggesting that it may be a lobby-driven hoax to push for renewable energy investments.Mocking the plight of Namibians – especially in a country that is 90% arid and identified as one of the most vulnerable to climate change – during a severe drought that is devastating the most vulnerable among us – is most unfortunate.The Namibian government has a real responsibility to consider and deal with the effects of climate change and its debilitating impact on our citizens and those of the broader global community. I write this piece from Hamburg, as Namibia and Germany have just returned from New York, having led the world on a precarious pathway to establish a new Pact for the Future. A new and redesigned multilateralism partnership with climate change, equitable distribution of resources, and more sustainable consumption of our natural resources are at the core of this new endeavour, which is to replace the current United Nations Sustainable Development Goals (SDGs) by 2030. While it saddens us to see privileged analysts cast rocks at the poor populace from their glass castles, it is indeed a feature of our democracy, one which we hold dear and is underpinned with the freest press in Africa.Green hydrogen is private sector-drivenFrom the onset, the government emphasised that a private sector-led economic recovery was key. Green hydrogen was not labelled as the only game in town to help Namibia emerge from the debilitating pandemic, but rather it was termed as one of the key strategic bets in the 2nd Harambee Prosperity Plan, together with Namibia’s emerging oil and gas industry and opportunities in the mining sector, where Namibia is home to several critical raw materials required in the energy transition. For a relatively small investment in time and cost, which has predominantly been financed by donor funding, exploring the economic viability of this opportunity may have an outsized and asymmetric payoff. At the time, Rowland Brown touted the opportunity as “pie in the sky” and a 2030 phenomenon that would not be impactful for Namibia at all. Three years on, Namibia raised more than N$2.2 billion in grant funding, established multiple green hydrogen pilot projects and has found Namibia elevated to the forefront of global research and development efforts, with various Namibians pursuing postgraduate and doctoral studies in this field. Not in 2030, but in 2024! One would ask: “Why does this matter?” It is critical to establish the track record of the naysayers in this space and their consistency in discrediting these efforts. So far, Rowland Brown’s predictions have been questionable at best.The Tsau //Khaeb a 'pristine and untouched area'One additional argument raised by Dr Chris Brown of the Namibia Chamber of Environment (NCE), and further echoed by Rowland Brown is that the Tsau //Khaeb is a pristine and untouched national park whose biodiversity ecosystem would be destroyed beyond repair with the establishment of green hydrogen projects. In earlier interviews, Dr Brown stated that he thought the green hydrogen projects would impact 40% of the park. Latest estimates from Hyphen Hydrogen Energy indicate that the project will at most have a 0.07% footprint and is targeting to reduce this impact further, with over 90% of this impact in the least environmentally sensitive areas of the park. Additionally, every Namibian appreciates that the park is a multi-use park and, as such, has been the economic backbone of the Namibian economy since the early 1900s.Excavating billions of tonnes of earth was required to mine diamonds in the same park, a process that has been crucial to the Namibian economy. Today, more than 0.76% of the park has supported mining activities for diamonds and currently supports mining prospecting licenses for various minerals, such as rare earth elements, to name but a few. Despite these activities, and with increased focus in recent years on advanced mining and environmental preservation practices, these activities have not destroyed the ecosystem of the park. In addition to this, in 2017, parliament passed an amendment to the Nature Conservation Ordinance, which included section 17(2)(k), which stipulated that the Minister (minister responsible for environment) may “establish a renewable electricity source (in the park) for the purposes of the ... protection of the environment or the combating of climate change.”The intention of the Namibian people has always been that a delicate balance needs to be struck between nature conservation and socio-economic development, as is true for any project. A balance we are doing our best to strike in all our endeavours. It is also rather paradoxical to me that both Browns have received significant funding from the hydrocarbon sector. In the case of the Namibia Chamber of Environment (NCE), funding sources appear deliberately structured to obscure their true origins, as one would discover upon reviewing NCE’s financial statements. Additionally, both Dr Brown and Mr Brown have openly lobbied for the establishment of oil and gas assets in the same park, some of which, like Kudu gas, may increase the emissions of the entire Namibian energy sector by more than 15 times, an estimate published by Cirrus Capital, Rowland Brown’s research firm.To claim that a maximum 0.07% footprint in the park – proposed to be developed to the highest international environmental standards, with extreme care taken to locate development in areas of least environmental significance – a luxury mining companies do not have – will cause irreversible damage to a 22 000 square kilometre park, more than twice the size of Qatar, is a statement that must be subjected to the 'true/false' test, as advocated by the flamboyant analyst.That being said, the government takes any impact on our nation’s biodiversity very seriously. This is why the government has commissioned a Strategic Environmental and Social Assessment (SESA) to ensure that we gather the real facts of potential developments within the park. This study is not solely for green hydrogen developments but also for projects supporting the emerging oil and gas industry, the five permitted wind projects, the proposed gas-to-power plant, and the expansion of Lüderitz, which will need to grow to accommodate these new industries. The Strategic Environmental and Social Assessment will help the government carefully evaluate, based on facts, both the potential impacts on the natural environment and the corresponding social effects.The economic viability of green hydrogenAnother key tenant of Rowland Brown’s was to warn the government not to subsidise what he terms to be perpetual loss-making green hydrogen endeavours – notion that betrays the lack of appreciation of what the opportunity at hand truly entails. What should be clear is that government is not building nor funding the five green hydrogen projects currently pursuing feasibility activities. Rather, government merely provided a platform and an invitation (a right to conduct a feasibility study and, in the case of one project, access to land on a compensated basis) for private sector players to explore the technical, environmental and economic feasibility of establishing various clean molecule applications in Namibia.Should none of these projects prove that they are feasible, the basic law of project finance dictates that they will not unlock the required equity and debt funding to proceed to implementation. For instance, the US$8.4 billion NEOM green hydrogen project in Saudi Arabia raised US$6 billion in bank funding before it commenced construction and H2Green Steel in Sweden similarly raised €6.3 billion in funding for its project, including €4.2 billion in debt.Given the absolute size of government, there is no subsidy it could provide to make an unfeasible project feasible, nor has government ever said it is seeking to provide financial subsidies to any project in Namibia, and to suggest so is factually incorrect. It’s truly unfortunate to see a fellow Namibian attempting to diminish or stifle the economic opportunities available to others. Surely, we can allow these feasibility studies to proceed peacefully and review the results together, with an objective and united perspective as one community!Green hydrogen vs. green industrialisationLastly, Rowland Brown spent a lot of time talking about the volumetric energy density of hydrogen compared to alternative fuels. Yet he conveniently overlooked the fact that none of the existing export-focused business cases we have seen so far are looking to export hydrogen as a fuel – a major oversight or a deliberate ploy to confuse the issue at hand? Most of the private sector developed cases are looking to export green hydrogen in the form of green ammonia or use hydrogen to add value to minerals and/or other resources in the country and export green products.In our review of emerging policies looking to stimulate the demand and supply of green hydrogen and the potential customers for Namibia’s green hydrogen, we are encouraged by the progress being made, despite the complexities. It would be remiss of me not to point out that it is not the government's responsibility to develop individual business cases for each of the green hydrogen projects in Namibia. Rather, the government’s role is to review these business cases, assess their viability once completed, and consider how commercially viable projects can be supported and integrated into Namibia's broader economic growth and SDGs.Analysts seeking to entertain their clients would do better to collaborate with the government in conducting informative, in-depth research on the real challenges in this sector. It is through addressing these obstacles together as a united people that we can unlock meaningful, transformational opportunities for our nation. I therefore invite the Browns to join hands with us in truly serving the Namibian child – our doors are wide open.*Obeth Kandjoze is the director general of the National Planning Commission and the chairperson of the Green Hydrogen Council**This opinion piece has been edited for length.

The true cost of entertaining analysis

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Namibian Sun 2024-11-22

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The true cost of entertaining analysis

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Namibian Sun 2024-11-22

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