Green Hydrogen powers an accelerating global energy transition

Solar and wind are the bountiful naturally occurring resources that will fuel the Middle East’s rise to renewable energy dominance, but in doing so, they are also unlocking the region’s green hydrogen potential.

A new report from Arthur D Little lays out a compelling case for a predicted boom in global green hydrogen production. With major industries worldwide looking to decarbonise, the wide-ranging utility of green hydrogen will boost its demand to the tune of becoming a $700 billion global market by 2050, according to the report.

In previous articles we’ve outlined how both the UAE and Saudi Arabia are particularly well placed to become global early adopters of green hydrogen production at scale. Both countries are politically motivated to drive their energy diversification efforts towards a clean, renewable mix. Both have worked hard to attract international investment and collaborative agreements, providing havens for renewable energy knowledge, expertise and capability. Both are ambitious in their commitment to delivering large-scale renewable energy production facilities, often competing for headline space with their respective ‘world-first’ and ‘world’s largest’ projects.

Crucially, both are also in prime position to exploit their regional natural gas reserves as the springboard for hydrogen production. As gas production looks set to soar in leading Middle East nations, this may turbo-charge the development of hydrogen, with a subsequent boost to green hydrogen production as demand climbs. The growing enthusiasm of agreements with countries keen to become ME hydrogen importers, such as the UAE-Germany Hydrogen Partnership, Saudi Arabia-Germany Hydrogen Agreement and the UAE-Japan Agreement, demonstrate just how much of a pressing need there is to tap the Middle East’s hydrogen potential quickly and determinedly.

UAE doubles commitment to clean energy: Minister of Economy Abdulla Bin Touq Al Marri announced UAE plans to invest an additional $160 billion in clean and renewable energy sources between now and 2050. To put the scale of this investment plan into perspective, the past 15 years saw the UAE invest $40 billion in clean energy, making its future decades’ plan a 100% increase on past efforts. Green and blue hydrogen will play a key role in the ramp up of the UAE’s net-zero plans, according to the senior minister.

NEOM Hydro plant plan advances: Air Products, ACWA Power and NEOM have inked an agreement on the previously announced $5 billion world-scale green hydrogen-based ammonia production facility powered by renewable energy. Once complete in 2025, it will be able to produce 650 tons of hydrogen per day by electrolysis using Thyssenkrupp technology; nitrogen by air separation using Air Products technology; and 1.2 million tons per year of green ammonia using Haldor Topsoe technology.

EC seeds another $1.8 billion into clean energy projects: The latest in a series of clean energy investment waves, the European Commission has greenlit another $1.8 billion of investments in 17 projects worldwide. Several are high-profile, large-scale green hydrogen and waste-to-hydrogen efforts. Together, the supported projects are predicted to save around 136 million tons of CO2 emissions within the first 10 years of operation.

Green Hydrogen becomes cheaper than gas in Europe: Across eight European countries, the cost of LNG (Liquified Natural Gas) is now higher than that of green hydrogen. Admittedly, this speaks more to the skyrocketing price Europe currently pays for gas than any major tumbling of green hydrogen costs. However, this state of affairs is important in highlighting the long-term viability of favouring green hydrogen development. This is yet another indication of how vital it is for Europe to extend its energy security options, particularly with a view to decarbonisation at the same time.

For some, the wheel of change is moving too slowly. 90% of ME energy consumption came from thermal in 2021, with gas representing the vast majority. With even advanced economies failing to reach 10% renewable energy mixes, the question of ‘when’ will the energy transition arrive is being asked more loudly than ever.

However, change is coming, and current geopolitical winds are speeding the long-promised transition along. For the long term, Europe, the US, China and much of the rest of the world is eyeing the Middle East as a source of renewable energy supplies. With its enviable solar and wind conditions, and prime geographical position, the Middle East will be able to move to a net exporter of hydrogen and green hydrogen much faster than perhaps any other region with the possible exception of China.

Once the green wave breaks, once the infrastructure and expertise are in place to ramp up production of green hydrogen, its effects will be felt across the world. 

https://www.consultancy-me.com/news/5024/middle-east-green-hydrogen-market-to-reach-700-billion-by-2050

https://www.offshore-technology.com/comment/middle-east-renewable-energy/

https://www.zawya.com/en/projects/utilities/uae-to-invest-160bln-in-clean-renewable-energy-sources-in-next-30-years-yir4evoo

https://www.airproducts.com/news-center/2020/07/0707-air-products-agreement-for-green-ammonia-production-facility-for-export-to-hydrogen-market

https://mercomindia.com/european-commission-invest-1-8-billion-innovative-clean-energy/

https://www.wsj.com/articles/green-hydrogen-is-cheaper-than-lng-in-europe-11658312552

https://www.offshore-technology.com/comment/middle-east-renewable-energy/