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According to the report, “Paving the way for green hydrogen: Key considerations for green H2 deployment” By 2050, green hydrogen projects of the Middle East will reach $700 billion.
The report studies green hydrogen (H2) and its role in the future. In the wake of decarbonization happening globally, H2 is becoming a key topic of discussion for industrial players and policymakers.
Carlo Stella, Partner at Arthur D Little Middle East, said, “Decarbonization has been raised again on top of the world’s agenda and countries are actively seeking to lower emissions and transition to clean energy sources.”
“The 2015 Paris Agreement has instigated widespread action, with leaderships encouraging technology-backed decarbonization in the years since. Green Hydrogen has been identified as a key technology to bridge decarbonization ambitions if the basic conditions and some pressing requirements are met in the short term,” he added.
Governments of United Arab Emirates (UAE) and Saudi Arabia are seeking for opportunities in the green hydrogen area to reduce the dependence on hydrocabrons and also include diversification of energy supply.
In 2021, Saudi Arabia announced a strategic green H2 development alliance with Germany to generate, process, use, and transport clean hydrogen, representing a significant stride as the Kingdom seeks to produce greater volumes of green H2.
Similarly in the UAE, a green H2 project was inaugurated at the Mohammed bin Rashid Al Maktoum Solar Park in Dubai this past May. In collaboration with DEWA, Expo 2020 Dubai, and Siemens Energy, the project is the first solar-driven green H2 producing facility in the Mena region.
Eddy Ghanem, Principal at Arthur D. Little Middle East, said, “Strategic alliances are certain to be impactful as countries and industry players work together to realize their shared and mutual green H2 objectives. That being said, the complex nature of green H2 production cannot be overlooked, and having dual sources of renewable energy is another necessity for sustained decarbonization success.”
While many locations have no shortage of single renewables sources, few are currently capable of meeting minimum requirements in terms of multiple sources.
One example is NEOM in Saudi Arabia, where the world’s largest green H2 plant is being developed. Upon completion, the availability of both solar and wind renewable energy in NEOM is expected to yield a combined electricity cost of $2-3 ct/Kwh, which will reduce the total cost of green H2 production to approximately $2/kg.
The report indicates three conditions necessary for the success of green hydrogen generation projects: cost-competitive production, reliability of production and supply, and hedging of risks to attract investors.
“Although green H2 projects are being pursued and more investments finalized, this momentum can only continue if thriving conditions are secured in the areas of policy, supply, infrastructure, and demand,” concluded Carlo Stella.