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Regional Report: Renewables richness, energy transition push Middle East, Africa to explore H2
The Middle East is rich in both fossil and renewable energy, in the forms of petroleum, sunlight and wind. As the chief crude oil producing region in a world turning increasingly toward lower-carbon energy sources, the Middle East is preparing to lean more heavily on its renewable energy sector by developing its low-cost solar and wind resources to power electrolyzers to produce H2 for export to green-energy-hungry Europe and Asia. Established net energy producers will have an easier time with this, although those countries that are currently net fossil fuel importers will face more difficulty balancing their domestic energy transitions with H2 export aspirations.
For example, OPEC kingpin Saudi Arabia intends to become the world’s number-one exporter of H2, and has expressed interest in transporting H2 to Europe via pipeline if the economics allow it. The country also intends to generate 50% of its power from clean energy sources and add 60 GW of renewable power generation capacity from solar and wind to its grid by 2030. Meanwhile, the UAE is finalizing an H2 roadmap and is looking to add H2 to its 50% renewables energy mix by 2050. Domestic energy giant ADNOC is pushing for large-scale production of blue H2 and blue ammonia, and intends to boost its overall H2 production from 300,000 metric tpy to 500,000 metric tpy.
Similarly, African nations are exploring ways to utilize their renewable energy potential in H2 projects as green H2 and green ammonia value chains emerge as viable, low-carbon ways to move and store clean, renewable energy. However, green H2 requires green electricity, and some African countries lack adequate renewable power infrastructure to support H2 development. Clear policies must support the expansion of renewables before coordinated efforts to develop local green H2 industries can get off the ground.
This report details some of the major H2 initiatives and projects being developed in the Middle East and Africa.
Saudi Arabia leads with Neom
Saudi Arabia’s planned “smart city” of Neom—a $500-B initiative in the northwest of the country (OPENING PHOTO)—will include a $5-B green H2 project to produce feedstock for green ammonia that will be exported to global markets. The Neom Helios project, involving Air Products, Acwa Power and Neom, reportedly will be the world’s largest green H2-based ammonia production facility.
The H2 plant will use 4 GW of renewable power from solar, wind and storage to produce 650 metric tpd of H2 from a thyssenkrupp-supplied electrolyzer. The project, which is scheduled to come onstream in 2025, will produce around 1.2 metric MMtpy of green ammonia. Air Products will be the exclusive offtaker for the ammonia, which will be used to produce green H2 for electricity or transportation. The project will also offset approximately 3 metric MMtpy of CO2 emissions.
Saudi Aramco also sent the world’s first shipment of blue ammonia to Japan in September 2020 for emissions-free power production. Furthermore, the company has signed an MOU with South Korea’s Hyundai Heavy Industries to provide liquid petroleum gas (LPG) to convert to blue H2. Aramco signed another MOU with Japan’s largest refiner, Eneos Corp., to study the development of a CO2-free H2 and ammonia supply chain. Aramco is also cooperating with China on research for blue H2 and ammonia, as well as carbon capture, utilization and storage (CCUS).
UAE in blue ammonia, green H2
Abu Dhabi is focusing heavily on blue H2 efforts over the medium term, although it is also examining options for producing green H2. For example, state-run Abu Dhabi National Oil Co. (ADNOC) has signed agreements with domestic renewables firm Masdar and UK-based energy giant bp to develop 2 GW of low-carbon H2 across hubs in the UK and UAE, with plans to expand as the project progresses.
ADNOC has also partnered with OCI-owned Fertiglobe for a large-scale blue ammonia project at its Ruwais facility (Fig. 1). The project will produce 1,000 metric tpy of ammonia for export to Asia upon startup in 2025. ADNOC sold its first cargo of blue ammonia from its Ruwais plant to Japan’s Itochu in August 2021 for use in fertilizer production, and has since sold additional cargoes to other Japanese buyers. Similarly, ADNOC is working with South Korea’s GS Energy to develop value chains for blue H2 and blue ammonia.
Fig. 1. ADNOC’s Ruwais ammonia plant. Photo: ADNOC.
ADNOC is also part of an H2 alliance with state entities Mubadala Investment Co. and ADQ to develop significant green and blue H2 production capacities in the UAE. Mubadala owns Masdar, which is advancing plans for a solar-powered green H2 demonstration project to power fuel cell buses in carbon-neutral Masdar City, as well as aircraft used by Etihad and Lufthansa. A second phase of the project, which is being developed by Siemens Energy and Marubeni, will examine the use of green H2 in the maritime and shipping sectors. Masdar is also working to develop a renewables and H2 value chain with Malaysia’s Petronas.
In May 2021, Dubai commissioned its first green H2 plant at the Mohammed bin Rashid Al Maktoum Solar Park, a vast energy park slated to have a capacity of 5,000 MW by 2030. The H2 pilot project, which will demonstrate solar-powered production of H2 for energy storage, was developed by the Dubai Electricity and Water Authority (DEWA) and Siemens Energy (Fig. 2). Dubai also aims to make all of its public transport emissions-free by 2050, which will encourage the use of H2-powered FCEVs.
Fig. 2. The green H2 project is located in DEWA’s outdoor testing facility in the Mohammed bin Rashid Al Maktoum Solar Park
R&D Center in Dubai.
Furthermore, a $1-B green ammonia facility in Khalifa Industrial Zone Abu Dhabi (KIZAD) will start production in Q2 2024, with exports from Khalifa Port targeted mainly to Europe and the U.S. A second, $1-B green ammonia plant at KIZAD will be powered by solar energy and supply ammonia for bunker fuel and for export via gas carrier.
In Sharjah, Bee’ah is evaluating plans for a waste-to-H2 project with UK-based Chinook Sciences. The project would include a production facility and an FCEV refueling station. The UAE is also producing green steel, using H2 from Abu Dhabi National Energy Co. Additionally, as per an agreement signed in July 2021, Emirates Nuclear Energy Corp. (ENEC) and France’s EDF Energy will explore the production of pink H2, powered by nuclear energy.
Oman goes green
The country aims to establish a green ammonia facility with a capacity of up to 1.3 GW. Uniper and OQ Alternative Energy are developing the Hyport Duqm project, which will have an initial capacity of 250 MW–500 MW, in Oman’s Duqm Free Zone. The green ammonia will be converted into H2 for use in Germany.
Oman also plans to expand its own renewable energy sector by adding 11% clean energy to its power mix by 2023 and expanding this to 30% by 2030.
Egypt, Jordan investigate clean H2. Linking the Middle East with North Africa, Egypt is exploring its potential for H2 development with the help of foreign players. Siemens Energy signed an MOU with Egyptian Electricity Holding Co. (EEHC) in August 2021 to scale up a green H2-based industry in Egypt. Initially, the two companies will pursue the development of an electrolyzer pilot project comprising 100 MW–200 MW of capacity.
Also, Italy’s Eni signed an agreement with EEHC in July 2021 to develop green and blue H2 in Egypt, using renewable energy and depleted gas fields to store CO2 produced from conventional H2 production. The study will also analyze potential domestic consumption of H2 and opportunities for exports. Egypt is also exploring green H2 for mobility, such as fueling tourist buses in Cairo.
In Jordan, government officials have met with a delegation from Australia’s Fortescue Metals Group to discuss investment opportunities in green H2 and ammonia, with the aim of exporting to international markets. No concrete project announcements have emerged to date.
Africa-Germany H2 initiative
Germany’s Forschungszentrum Jülich GmbH is exploring, together with 15 West African countries (ECOWAS member states) and 16 Southern African countries (SADC member states), the potential of green H2 production in African regions. The H2 Power-Africa Atlas Project, announced in May 2021, will assess the potential of generating green H2 in West and Southern Africa. The project results will be presented in the form of an interactive atlas, which will show the locations of potential green H2 pilot plants to be considered in the next phase of the project.
Germany is also working with Namibia, a key location in the H2 Power-Africa Atlas, to produce green H2 from solar energy at prices as low as $1.80/kg. Germany is working to secure prime locations for H2 production supported by large renewable power installations.
Morocco studies green ammonia
A JV of Greece-based Consolidated Contractors Co. (CCC) and Ireland’s Fusion Fuel Green are planning to develop an $850-MM green H2-powered ammonia project in Morocco. The HEVO Ammonia Morocco project is expected to produce 183,000 metric t of green ammonia by 2026, with a production capacity of 31,000 metric tpy of green H2 and CO2 emissions abatement of 280,000 metric tpy. Work on the project is expected to begin in 2022 after a feasibility study is completed.
Morocco is also working with the International Renewable Energy Agency (IRENA) to advance its renewable H2 economy and accelerate the uptake of renewable energy as it seeks to become a major green H2 producer and exporter. The two parties will jointly develop technology and market studies, and explore policy capabilities to engage the private sector.
Morocco aims to increase the share of renewables in its energy mix to more than 52% by 2030. Greater renewables and H2 production would help the country reduce its dependence on coal for power generation.
South Africa investigates H2 mobility
Domestic energy firm Sasol is working with Toyota to develop a green H2 mobility system for H2-powered trucks along the country’s long-distance freight corridors. The South African company is also studying the improvement of long-haul, heavy-duty freight efficiency and sustainability via H2 with domestic fleet operator Imperial Logistics.
Furthermore, Sasol is working with the Industrial Development Corp. of South Africa (IDC) to develop a green H2 economy in South Africa. The organizations will work to develop policy frameworks for green H2, as well as pilot- and commercial-scale H2 projects.
Renewables-driven potential abounds
Although Europe is leading the global revolution in green H2, the oil-rich Middle East has a vested interested in developing its renewable energy resources and trade partnerships to facilitate the regional and global transitions to low-carbon, sustainable energy. Africa, too, is rich in renewable energy potential to power H2 production and eventual exports.
The IRENA noted in a June 2021 report, “The potential levelized cost of hydrogen, assuming the low solar photovoltaic and onshore wind prices from the recent auctions in Saudi Arabia, could be as little as $1.62 per kilogram of hydrogen. This compares favorably with the hypothetical cost of natural gas steam methane reforming, with today’s carbon capture, utilization and storage costs between $1.45 and $2.40 per kg of hydrogen.”
According to advocacy group Dii Desert Energy and consultancy Roland Berger, the Middle East could be on track to reap $200 B/year in H2 revenue by 2050. With the region pouring billions of dollars of investment into the H2 sector, Dii Desert Energy believes that the production cost of H2 could fall by 30%–50% by 2030 in the Gulf Cooperation Council (GCC) nations. Dii Desert Energy expects the cost of green H2 to reach parity with the cost of blue H2 by 2025, and with gray H2 by 2030. H2T
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