Address by the Director-General of Science and Technology, Dr Phil Mjwara, at the IPHE CEOs Forum on 5 December 2018

Dr Sunita Satyapal, Chair of the International Partnership for Hydrogen and Fuel Cells in the Economy (IPHE);

Mr Tim Karlsson, Executive Director of the IPHE;

Mr Bernard Frois, former Chair of the IPHE;

Dr Thulani Dlamini, CEO of the Council for Scientific and Industrial Research;

Mr Barlow Manilal, CEO of the Technology Innovation Agency;

Ms Sibongile Shongwe, CEO of the Platinum Incubator;

Mr Patuxolo Nodada, CEO of Busmark;

Mr Josua le Roux, General Manager of Air Products;

Mr Mmboneni Muofhe, Deputy Director-General: Technology Innovation at the DST;

Colleagues from other government departments and entities;

IPHE Delegates;

Ladies and Gentlemen:

 

 

Thank you for inviting me to share some thoughts at today's CEOs forum.

 

Fifteen years after its establishment, the International Partnership for Hydrogen and Fuel Cells in the Economy includes 18 member countries and the European Commission, representing about two-thirds of the world's population and GDP.

 

The IPHE serves to facilitate and accelerate the transition to clean and efficient energy and mobility systems through focused international research, development, demonstration and deployment activities related to hydrogen and fuel cell technologies. The organisation provides a forum for sharing information, experiences and best practices among member countries on initiatives, programmes and policies, as well as safety codes and standards, to accelerate the widespread deployment of hydrogen and fuel cells in the economy and enable energy, economic and environmental security worldwide.

 

It is my honour and privilege to extend a warm welcome to the delegates of the member countries of the IPHE that have chosen to come to South Africa for the 30th IPHE Steering Committee Meeting.  South Africa became a member of the IPHE Steering Committee in 2009 through the participation of the Department of Science and Technology (DST) and first hosted the IPHE Steering Committee meeting in 2012.  We are grateful for the opportunity to show you how much the local hydrogen and fuel cell sector has matured since your last visit.

 

The Hydrogen Council was established last year at the World Economic Forum and is made up of more than 50 private-sector companies, some of which have operated in South Africa for many decades.  The Hydrogen Council is a global initiative aimed at ensuring that the private sector accelerates investment in the development and commercialisation of hydrogen and fuel cell sector in support of reductions in greenhouse gas emissions. 

 

The purpose of this morning's CEOs' Forum is to promote discussions between the private and public sector about opportunities to increase the uptake of hydrogen and fuel cells globally.  We will also look at specific opportunities for South Africa.

 

South African policy landscape

 

2018 holds special significance for our country, as it marks 10 years since the national flagship programme Hydrogen South Africa, or HySA, was launched after our Cabinet approved the implementation of the National Hydrogen Fuel Cell Technology Research, Development and Innovation Strategy.  In 2011, platinum group metals were chosen as a strategic value chain under the South African Minerals Beneficiation Strategy, which provides a framework for the country's efforts to translate its mineral resources endowment into a competitive advantage.  The implementation of HySA is also linked to national policies such as the Industrial Policy Action Plan, which seeks to enhance the quantity and quality of exports, promote the creation of decent employment and diversify the economy, including through the promotion of the green economy.  In 2016, Hydrogen South Africa was accredited as one of the Near-Term Priority Climate Change Flagship Programmes – a status given to national programmes with the potential to play a pivotal role in South Africa's commitment to reduce its greenhouse gas emissions under the Paris Agreement, while ensuring a just transition as encapsulated in the country's National Climate Change Response White Paper.

 

New White Paper on Science, Technology and Innovation

 

The Department of Science and Technology released the first draft of the White Paper on Science, Technology and Innovation in October 2018, following reflection on the performance of South Africa's national system of innovation over the past two decades.  We found that we had made good progress, establishing institutions like the Technology Innovation Agency and the South African National Space Agency, and building up international networks through science diplomacy efforts.  Our publication numbers increased threefold.  However, the review also found that we still needed to improve the coordination of science, technology and innovation policy across government, and to enhance the involvement of the private sector and civil society. 

 

In support of public-private partnerships and to increase and cover gaps in technology commercialisation funding, a sovereign innovation fund is to be created to leverage co-investment by the public and private sectors.  The fund will be designed to complement and enhance existing funding instruments, and to provide large-scale funding for the development and maturation of radical innovations and emerging industries. 

 

I believe that the fund is relevant to the fuel cell sector in that it can facilitate the local manufacture of fuel cells in South Africa and support the uptake of locally developed technologies in both the local and global markets.  Hydrogen South Africa is transitioning from a research, development and innovation programme to a manufacturing programme, and strategic partnerships with the private sector will be critical. 

 

Through the Cabinet-approved HySA Strategy, the DST is playing a strategic role in facilitating the development of technology in support of the establishment of a local hydrogen and fuel cell technologies industry, in order to achieve socio-economic impact.  Like the several stages that technologies undergo in the transition from the lab to the market, the HySA programme has three phases. The first is research and development with a focus on producing students, publications and patents. In the second phase, the focus is on technology demonstrations in pilot markets through public-private partnerships, in order to create a market pull for products and services that lead to job creation.  Once the initial market has been created, the focus in phase 3 will be on sales, job creation, export revenue and market share.

 

During the first phase of HySA (technology catch-up), the implementation of the HySA Strategy saw the establishment of three centres of competence (HySA Systems, HySA Infrastructure and HySA Catalysis) at universities and science councils.  These are now fully functional and have gained international recognition through their research, development and innovation work.

 

While the first phase of the HySA Programme succeeded in producing students and knowledge products such as patents and publications, its biggest impact has been through technology demonstrations in a real commercial environment, such as the first fuel-cell powered forklift and refuelling infrastructure that was launched at the Impala Platinum Refinery in Springs in March 2016. In such instances, hydrogen fuel cell technology is making a difference by contributing to increased productivity in the organisation.  This was the first public-private partnership, which has been strengthened over time, and has led to a focus on hydrogen fuel cell commercial outputs on products in the materials handling sector. 

 

The second phase of HySA, which ends this year, is focused on developing a mature local and regional market, including the critical supply chain that South Africa needs to establish in partnership with global original equipment manufacturers (OEMs).  The inclusion of fuel cells in the Industrial Policy Action Plan and the location of fuel cell manufacturing in special economic zones has gone a long way to ensuring that local companies can be globally competitive, as the initial costs are greatly reduced through tax subsidies and infrastructure support.  Strategic partnerships with global OEMs that are interested in deploying systems in the African market and have committed to using HySA components in their fuel cell systems has been a critical part of refining and commercialising HySA intellectual property.

 

Through lessons learned in our participation in the IPHE global forum, it is clear that the penetration of fuel cell electric vehicles will be critical for economies of scale to reduce the overall cost of fuel cell technologies.  South Africa is looking closely at understanding how policy levers that enabled the successful deployments of public buses in other parts of the world can be replicated to enable the movement of passengers using public buses in South Africa and neighbouring countries. 

 

Increased investment to accelerate uptake


Globally, governments are investing US$1 billion annually to facilitate research, development and innovation in support of the adoption of hydrogen and fuel cell technologies.  This has led to the following developments:
•    Industry shipping over 650 megawatts of fuel cell units worldwide in 2017.
•    The installation of over 260 000 combined heat and power fuel cell units.
•    The deployment of over 8 000 fuel cell electric vehicles around the world.
•    Nearly 20 000 warehouse material handling units.
•    The deployment of over 200 fuel cell buses.
•    Fuel cells being used to propel trains, trucks and other forms of heavy-duty transportation.

A recent report from the Hydrogen Council estimates that to build a hydrogen economy an annual investment of about US$20 to 25 billion – a total of about US$280 billion until 2030 – is required, from production to distribution to retail.  This would double the production of clean hydrogen, provide the required distribution infrastructure, produce fuel cell electric vehicles, heating equipment and components at a decreasing cost vital for deployment in the market.

 

Expected outcomes of the CEOs' Forum

 

During today's deliberations, participants will share government and private sector perspectives and experiences in fuel cell hydrogen production and consumption cluster approaches to increase the likelihood that the roll-out of fuel cell technologies will be sustainable after the piloting and demonstration stage.  Practical case studies from other countries, which have facilitated the use of clusters to accelerate the deployments of fuel cell technologies, will be shared.  There will be presentations and discussions about the challenges and opportunities of ensuring success; leading niche applications for fuel cell technologies that are commercially viable in the market today; policies, regulations, codes and standards that create an enabling policy environment; and engaging stakeholders about the challenges and opportunities of fuel cells and hydrogen.

 

I hope that today's deliberations will assist in unlocking the potential of fuel cells in the South African economy.

 

Thank you.

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