jobs and contribute a N$37-billion boost to the country’s GDP by 2050, global consultancy firm McKinsey & Company has forecast.
The McKinsey & Company’s study, conducted as part of Namibia’s green manufacturing strategy, highlights the importance of embracing local production to drive economic growth.
“Fulfilling 100% of expected domestic demand from the hydrogen industry would require a production capacity of 300-500 megawatts (MW) per year for 2025 demand,” the report notes.
It further outlines the necessary investments, stating that a 300 MW/year cell production facility would require around US$6 million (N$112 million) in investment, while a module assembly plant of similar scale would necessitate US$2.5 million (N$47 million) in investment.
“To meet the anticipated demand for 2050, an annual production capacity growth rate of 13% is essential,” the study suggests.
The report recommends locating solar PV production facilities near green hydrogen production centers in the Karas and Erongo regions to maximize efficiency and synergy.
McKinsey proposes strategies for government support, including engaging green hydrogen producers to commit to buying locally produced solar PV hardware, attracting investments from established international producers, and facilitating access to financing for domestic producers.
“GoN can support local solar PV cell production and module assembly through engaging green hydrogen producers to commit to buying locally produced solar PV hardware and thus creating committed demand (order book) that could be used to engage investors and established solar hardware OEMs,” it reads.
The firm notes that China’s dominance in polysilicon ingot and wafer production, driven by low costs and government support, has led to a 70% global price drop over a decade, creating a significant barrier to entry for competitors.
Thus, Namibia’s competitive advantages come from a significant projected high local demand driven by the growth of green hydrogen production that would require 60GW of solar capacity by 2050 and low labour costs.
“Cell production and module assembly in Namibia is estimated to be 10% more expensive than in China; localising adjacent industries could reduce costs (e.g., glass for module assembly, and polysilicon production from silica sand in the Kalahari and Namib deserts that contain 90% and 80% silicon dioxide respectively),” it notes.
PV systems capture the sun’s energy and convert it into electricity that can be used in households, commercial spaces, and at a utility scale. They comprise four key components that make up the panel/ module: polysilicon, ingot, wafer and cells.
