The Middle East Can Develop As The Global Centre For Green Hydrogen

The global energy shift involves storing, transporting, and delivering energy globally as well as producing sustainable energy locally The Middle East is well-positioned to dominate the global green hydrogen industry thanks to its wealth of renewable energy sources, convenient location, and significant ongoing expenditures in logistical infrastructure It not only has the potential to produce green hydrogen at scale but also to export it all over the world to meet the rising demand

Many Middle Eastern countries are aiming to become major producers of green hydrogen, with the potential to displace fossil fuels as a primary source of energy for transportation, power, and heating which together account for roughly three-quarters of global greenhouse gas emissions

Although there are still many obstacles to overcome before green hydrogen can reach its full potential, the area is well-positioned to play a big role. According to research, the cost of producing solar, wind, and green hydrogen in the Gulf is around one-third of the world average, and Gulf solar panels generate twice as much electricity as those in Germany

With a 1.2 GW power generation capacity, Noor Abu Dhabi is one of the largest single-site solar power plants in the world, and this year will see the start of operations at the 2 GW Al Dhafra solar power plant in the emirate When its financing was approved in December 2020, Dhafra established a solar pricing record low of AED0.0497/kWh or $0.01353/kWh. Mohammed bin Rashid Al Maktoum Solar Park in Dubai has a 1.8 GW capacity now and will eventually have a 5 GW capacity A portion of this capacity will be used by Gulf governments to produce green hydrogen

Saudi Arabia is constructing a $5 billion green hydrogen project in NEOM that will use renewable energy to produce 650 tonnes of carbon-free hydrogen per day The plant will begin production in 2026 Saudi may be able to generate the least expensive green hydrogen, there are several other challengers nearby in the context of other Middle Eastern nations with comparable advantages and an equally strong political will to fully utilize their newest source of competitive advantage

The UAE and Saudi Arabia were quick to recognize the opportunity and devised bold plans The UAE hopes to capture 25% of the global hydrogen market, while Saudi Arabia hopes to become the world's largest supplier. Oman and Egypt are two other countries in the region making significant strides As of now, more than 45 green hydrogen projects in the Middle East and Africa are in the works More than 40 investments totaling more than $20 billion have been announced for the period up to 2030, in addition to numerous smaller projects

For many years, the Middle East's expansion as a regional economic superpower has been fueled by the massive oil and gas reserves that Saudi Arabia, Qatar, Kuwait, and the UAE own There is no question that immediate action on hydrogen is required, even though the region's transition away from fossil fuels is one of the largest challenges it faces to sustain this position Many of the countries in the region are now positioned as trailblazers in the switch to more sustainable types of energy thanks to a long history of oil and gas exploration, production, and investment in technological skills

According to a recent publication from PWC, the creation of green hydrogen necessitates a streamlined supply of affordable, sustainable energy all year long The Gulf Cooperation Council (GCC) nations experience some of the greatest levels of sun exposure worldwide. According to our calculations of global supply and demand, exporting nations may be able to take advantage of a market worth $300 billion annually by 2050 for almost 200 million tonnes of green hydrogen Additionally, the green hydrogen export market has the potential to generate up to 400,000 operations and maintenance employees, of which 100,000 will be located in electrolysis facilities and 300,000 in renewable energy production

As per the report, around $2 1 trillion in expenditures will be needed to meet the demand for green hydrogen exports in 2050 Of this sum, $1 trillion must be spent on the construction of specialized renewable energy capacity, $900 billion on the establishment of facilities for exporting hydrogen, and $200 billion on the advancement of water electrolysis infrastructure

Producers can choose from several conveyance options, including compressed or liquefied hydrogen, ammonia-based hydrogen, and organic carrier molecules. The least expensive method of transporting hydrogen is through pipes for lengths under 1,800 KMs Ammonia ships are the most affordable option for longer routes

The Sustainable Energy Authority (SEA) President of Bahrain discussed the project with a high-level delegation from Al Judy Company, led by Chairman Ibrahim Ali The 4 MW project will be built in its first phase on land with a total area of 20,000 square meters and an estimated cost of $150 million

Oman aims to increase green hydrogen production from 32,500 to 3 75 million tonnes per year by 2040 and from 3 5 million to 8 5 million tonnes per year by 2050 The country estimates that it will need a cumulative investment of $140 billion over this period to reach its production target by 2050 Hydrogen Oman Company (Hydrom) has issued requests for qualifications (RFQ) to more than 40 companies that have expressed an interest in the recently announced blocks for green hydrogen projects in the Sultanate Oman’s Ministry of Energy and Minerals (MEM) started offering blocks for green hydrogen projects in November 2022, via Hydrom The first round opened on November 6th with two blocks on offer in Duqm to develop green hydrogen projects. ACME Group announced the signing of a land agreement to set up one of the world’s largest green ammonia projects at the Special Economic Zone at the Port of Duqm in Oman The agreement was signed with The Public Authority for Special Economic Zones and Free Zones, a Government authority of Oman.

ReNew Power signed the Framework Agreement with the Government of Egypt to set up a Green Hydrogen plant in the Suez Canal Economic Zone with an investment of $8 billion and a targeted annual production of 220,000 tons of green hydrogen The Framework Agreement follows the Memorandum of Understanding (MoU) signed in July 2022

ENGIE and Masdar have signed a strategic alliance agreement to explore the co-development of a UAE-based green hydrogen hub The two companies are looking to develop projects with a capacity of at least 2 GW by 2030, with a total investment in the region of $5 billion

A Strategic Framework Agreement (SFA) and a Renewables Data Collection Agreement were signed between British Petroleum (BP) and the Ministry of Energy and Minerals in Oman to support the possible development of multiple GWs of top-tier renewable energy and green hydrogen in Oman by 2030. Under the deal, bp will gather and analyze solar and wind data from an area of land that is 8,000 km2 in size The assessment will then assist the Omani government in permitting the future construction of renewable energy hubs in this region at acceptable sites to take advantage of these resources

While not all GCC nations have the same level of interest in hydrogen, they all do While Oman is developing new institutions and implementing numerous projects, Saudi Arabia is starting large-scale initiatives without any kind of institutional framework The UAE has made a policy announcement and realized its first projects successfully Qatar is still concentrating on exporting its LNG and blue hydrogen Bahrain and Kuwait continue to be conservative and only make investments after conducting feasibility studies The Gulf states are uncertain about the hydrogen color spectrum: Oman is concentrating on the green; Qatar is sticking with blue, and the UAE and Saudi Arabia are planning to strike a compromise between the two

It is hardly intrinsic that the GCC governments have such a keen interest in hydrogen In its place, it pursues the hope of assuring prosperity and foreign demand. Despite a global energy shift, hydrogen offers the Gulf states the chance to essentially maintain their current economic and political power structures Green hydrogen is a supplement to current (fossil) energy exports and a long-term risk hedge