Comparative analysis of the cost of Green hydrogen and White hydrogen in Africa: “Case of Bourakébougou, Mali”

Abstract

Greenhouse gas (GHGs) emissions contribute to climate change due to conventional energy production and use across the globe. In this sense, economies worldwide are now transitioning to cleaner energy systems with the purpose of providing net-zero carbon. Therefore, hydrogen is increasingly becoming a key part of this development due to its flexible production pathways, versatile uses, and ability to facilitate decarbonized electrification, energy security, and industrial applications. While more global attention focuses on green hydrogen from renewable electrolysis, its use in Africa remains limited by high capital costs, infrastructures gaps, and accessible funds. On the other hand, naturally occurring white hydrogen discovered in Bourakébougou, Mali offers a potential low-cost alternative, but it cost competitiveness compared to green hydrogen in Africa is not known. This research addresses this knowledge gap by conducting a comparative economic assessment of green and white hydrogen production in Bourakébougou, Mali. Utilizing economic modelling approach, Levelized Cost of Hydrogen (LCOH) and Net Present Value (NPV), the research takes into account capital expenditure (CAPEX), operating expenditure (OPEX) and a discounted cash flow analysis for a 25-year project duration. The result indicates that green hydrogen, produced by off-grid solar-powered electrolysis, is of high CAPEX and a low OPEX with a LCOH of 4.78 USD/kg and a relatively low NPV of 9.54 million USD. On the other hand, white hydrogen, naturally extracted from subsurface geological layers, has a LCOH of 1.79 USD/kg and a high NPV of 44.39 million USD and represents more economically feasible option under prevailing conditions. Sensitivity analysis determines that the most significant driver of green hydrogen economics is CAPEX and OPEX has a stronger impact on white hydrogen economics. Green hydrogen is determined to have significant long-term environmental and socio-economic benefits, whereas white hydrogen has a short-term economic prospect for Bourakébougou, particularly in a region with favorable geological resources.