Will The World’s Largest Oil
Region Become A Hydrogen Hub?
By Tsvetana Paraskova - May 22,
2021, 6:00 PM CDT
The biggest oil-exporting region in the
world, the Middle East, has set its sights on becoming a major clean
energy exporter of green hydrogen. The largest oil producers in the
Arab Gulf have jumped on the hydrogen bandwagon — especially its
so-called green variety produced from water electrolysis using
electricity from solar or wind — as it gains momentum with governments
and the world’s largest international oil companies.
Hydrogen is expected to play a prominent role in lowering carbon
emissions from energy-intensive industries. And the Middle East
doesn’t want to miss out on this opportunity.
On the one hand, it wants to show the world it can export clean
energy—not only crude oil—as the global energy transition accelerates.
On the other hand, the oil-dependent economies of some of OPEC’s
largest producers are determined to diversify into green energy
exports and away from oil.
This past week, two announcements of green hydrogen projects in the
Middle East made headlines: Dubai launched the first industrial-scale
green hydrogen project in the region, while Oman announced plans to
build one of the largest green hydrogen plants in the world.
Dubai, one of the emirates of the United Arab Emirates (UAE), which is
currently OPEC’s third-largest oil producer, launched the first
industrial-scale, solar-powered green hydrogen facility in the Middle
East and North Africa in collaboration with Siemens Energy, Dubai
Electricity and Water Authority (DEWA), and Expo 2020 Dubai.
During the day, the plant uses some of the photovoltaic electricity
from the Mohammed bin Rashid Al Maktoum Solar Park to produce green
hydrogen via electrolysis. At night, the green hydrogen is converted
into electricity to power the city with sustainable energy, Siemens
The Solar Park is expected to generate as much as 5 gigawatts (GW) of
clean energy by 2030 as the largest single-site solar park in the
Companies in the region, international technology partners, and
analysts believe that Dubai and the whole of the Middle East have a
bright future in solar power generation, considering the abundant
sunshine in the region.
“Against the background of low costs of electricity for solar PV and
wind power in the region, hydrogen has the potential to be a key fuel
in the energy mix of the future and could open up energy export
opportunities for those areas with access to abundant renewable
energies,” Siemens Energy said.
The UAE could become an exporter of hydrogen, Siemens Energy CEO
Christian Bruch told CNBC’s Dan Murphy in an interview this week.
“I do believe it must be, it will be, it should be, one of the key
future commercial models in the UAE and the wider region, to be also,
in future, an energy exporter for the world,” Bruch told CNBC.
Another oil producer in the Middle East, Oman—not an OPEC member but
part of the OPEC+ alliance—also made a major announcement involving
green hydrogen this week.
Oman’s state-held energy company OQ, Hong-Kong-based green fuels
developer InterContinental Energy, and Kuwait’s government-backed
clean energy investor and developer, EnerTech, announced a plan for
one of the biggest facilities of green hydrogen in the world. The
plant will be powered by 25 GW of renewable energy and could cost as
much as US$30 billion.
“Given the site’s strategic location between Europe and Asia, as well
as excellent solar irradiance and wind resource facing the Arabian
Sea, the development is well-positioned to offer a secure and reliable
supply of green fuels globally at a highly competitive price,”
InterContinental Energy said.
“Alternative energy is a key driver for OQ’s long-term growth and a
cornerstone of its strategy. It is also in line with the country’s
ambitious Oman Vision 2040 that aims to diversify the nation’s
resources and maximize the financial value derived,” said Salim Al
Huthaili, CEO Alternative Energy at OQ.
The region’s top oil producer and the world’s largest oil exporter,
Saudi Arabia, is also eyeing green hydrogen projects and a share of
the emerging clean hydrogen market.
NEOM, the future sustainable city promoted by Saudi Crown Prince
Mohammed bin Salman, signed last year a deal with Air Products and
Saudi ACWA Power for a $5 billion green hydrogen-based ammonia
production project, which will export the product.
All these plans suggest that the oil powerhouse Middle East is not
immune to the energy transition and growing global demand for clean
By Tsvetana Paraskova for Oilprice.com
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