Tlou Energy, the country’s coal bed-methane developers, said Friday it was developing a hydrogen strategy to complement its gas-to-power project.
The Botswana Stock Exchange quoted company is pioneering the development of hydrogen as a clean energy fuel at the Lesedi Power plant site.
It said Lesedi is ideally located to be regional hydrogen and distribution hub as the gas can be a fully renewable energy source for transportation purposes. Giving an update to shareholders, managing director, Tony Gilby said a hydrogen strategy would benefit from Tlou’s extensive approvals secured to date.
These include environmental, gas and solar generation licences, access to land and established in-country operational expertise.
“The hydrogen economy is rapidly developing and could open multiple additional business opportunities such as solid carbon products, oxygen, ammonia for energy storage, fuel cell electric vehicles, agricultural and medical applications,” he said.
Gilby added Tlou is well-positioned to produce hydrogen from different methods adding that the company has large and proven resources to develop these products.
He further said the development of hydrogen is planned to run in tandem and with time could develop into a lucrative opportunity for the company given the availability of Tlou’s gas and solar power.
Tlou energy’s flagship Lesedi Project has a verified 252 billion cubic feet of CBM near Lephephe, capable of generating 100 megawatts electricity over 25years. Meanwhile, Gilby said the company is in ongoing discussions with a number of parties in relation to a $10 million (about P100m) project finance package for the initial phase of the Lesedi gas-to-power project.
The funding packgae includes construction of transmission lines and sub-stations. “Two of these parties are currently working through their internal approval processes and have not expressed a specific need to conclude the 10MW PPA in order to progress,” Gilby said.
“Others have indicated a preference for the 10MW PPA to be concluded prior to moving forward.” He however said Tlou is not in a position to influence these third-party internal processes and therefore cannot estimate how long this may take.
Once a project finance package is in place and it is commercially prudent, significant work on the transmission lines and sub-station can be conducted, he said. Gilby said on the 10MW PPA (power purchase agreement), confidential negotiations are continuing and progress is being made, adding that a market update will be provided in due course. The primary focus for the company is to progress the Lesedi gas-to-powerpower project.