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Using Angola's power glut for Germany's energy transition

Jonas Gerding in Angola
June 5, 2023

German developers want to exploit a power plant in Angola to produce hydrogen for Europe's industries. At the same time, many households in Angola have no electricity. Will remote areas lose out against economic might?

A picture of the Lauca Dam wall on the foot of which excess water is realeased downstream
The four turbines at the Lauca power plant produce about 856 megawatts of electricityImage: Jonas Gerding

Lars Schneider walks along the wall of the Lauca dam. It is 156 meters (511 feet) to the bottom.

Recent rainfall in Angola, where the dam is located, has been abundant enough to fill the huge reservoir upstream. And excess water is now gushing into the river valley at the foot of the dam, making "an engineer's heart beat faster," said Schneider. The tall 50-year-old German engineer is visiting the dam on behalf of the Nuremberg, Germany-based project development company Gauff.

These are completely different dimensions than in Europe, Schneider said of the dam that is about a four-hour drive southeast of the Angolan capital, Luanda. "Here on the site, you can physically feel what you're ultimately planning," he told DW.

Gauff and another German company, Conjuncta, have teamed up with Angola's state-owned energy company Sonangol to produce green hydrogen using some of the power generated by the Lauca plant.

Lars Schneider and two workers at a transformer station in Angola
Lars Schneider (left) from Gauff believes Angola's grid infrastructure will lend itself to hydrogen productionImage: Jonas Gerding

As early as 2025, the €1 billion ($1.3 billion) project is supposed to supply Germany with the carbon-free gas that is crucial for the green transformation of the energy system in Europe's biggest economy. It is intended to provide renewable power in times when the sun is not shining and the wind is not blowing.

Test run for German H2 supply

Gauff has been in Angola for more than 20 years. It has built numerous infrastructure projects that give its engineers intimate knowledge of the country's geology and waterways — like the Cuanza River, whose meandering banks and deep gorges lend themselves perfectly to hydropower.

"That's when we began thinking about taking a closer look at the possibilities here in Angola," said Schneider. What they found was the Lauca hydropower plant that was built not too long ago.

To ensure future supplies of renewable hydrogen, the German government recently opened so-called hydrogen offices in Nigeria and Saudi Arabia. In addition, private-sector projects are being planned in Namibia and Morocco.

Gauff's project in Angola, however, has a head start because green hydroelectric power is already available, which means hydrogen production can begin sooner rather than later.

Hydrogen — fuel of the future?

Power glut meets hydrogen shortage

At the Lauca dam, underground pipes channel the water to the turbines of the hydroelectric plant about 2 kilometers (1.2 miles) away. But only four of its six turbines are currently in operation.

Moises Jaime is the director of the Lauca power plant. Standing in front of a huge wall of screens, he explained that the four turbines are producing about 856 megawatts of electricity. But the plant's total capacity is actually more than 2,000 megawatts.

But there's not enough demand for the electricity, he said, because Angola's energy strategy was based on overblown expectations of industrial growth. As a result, the power produced by the Lauca plant and other ambitious hydropower projects along the Cuanza River cannot find enough commercial customers.

The German project developers have offered Angola a way out of this energy dilemma, offering to convert 400 megawatts of Lauca's electricity into enough green hydrogen to supply about 450,000 German households.

Lars Schneider and Moises Jaime talking in the turbine hall of the Lauca hydroelectric power plant
Moises Jaime would be more than happy to see his turbines operating at full capacity and producing hydrogenImage: Jonas Gerding

Lauca director Jaime welcomed the "good initiative" of the Germans, adding that the plant's turbines "will be happy because they can be pushed to their limits" producing at full capacity for the first time. "Without industry, we can do absolutely nothing here," he told DW.

Not only will Jaime's turbines be happy, but the Finance Ministry in Luanda will be, too. The hydrogen deal opens up a new market and source of revenue for Angola, whose oil and gas exports already make up about 85% of state income.

Will Angolans remain in the dark?

But Sergio Calundungo has doubts about the hydrogen partnership with Germany. The social activist and founder of the Angola Social Observatory nonprofit organization has overseen development projects in rural areas for many years and has expressed concerns about green energy exports.

Only about 42% of Angolans have access to electricity, and many municipalities are still not even connected to the national grid, he told DW in his office in Luanda. He refuted the idea that there aren't enough customers for the electricity, arguing that private households just may not be the customers the utilities want.

A picture of Sergio Calundungo sitting on a desk with a laptop computer in front of him.
Calundungo has urged developers not to repeat the mistakes of the past and ignore the needs of local communitiesImage: Jonas Gerding

"There are economic hurdles to accessing electricity because of people's lack of money," he said, adding that the government is also failing to invest in the necessary grid infrastructure.

In theory, it would be possible to supply foreign countries with green hydrogen, he argued. But that has to go hand-in-hand with improvements for the Angolan population. "We have to do both at the same time," he said.

Hydrogen conversion game

Meanwhile, on a country road just outside of the capital, Lars Schneider looks out at a maritime scene of cranes and quays that are part of a new port under construction. German company Gauff wants to set up a hydrogen production facility on the site.

Schneider thinks the location is ideal because it marks the end point of a 200-kilometer high-voltage line from the Lauca power plant. A river nearby could provide the water for the electrolyzers that make the hydrogen. Actually, it's not hydrogen they produce but liquid ammonia, which is easier to transport with cargo ships.

"Ammonia can be liquefied at relatively mild temperatures of minus 33 degrees [Celsius]," said Schneider, comparing it with the frigid storage temperature of minus 253 degrees Celsius (minus 423 Fahrenheit) for hydrogen.

Once in Germany, the ammonia would then be converted back into hydrogen that power plants use to generate electricity. Schneider is convinced that what sounds like a complex process may one day solve Angola's electricity problems. Sustainable energy to develop remote areas in the country would be "a wonderful thing to use hydrogen for," he said.

This article was originally published in German.