Middle East and North Africa Countires Invested $1.3 Trillion to Explore the Green Hydrogen Market
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Zhonglin International Group Date：07-13 999 Belong to：Industry Related
The solar and wind resources are very rich in the Middle East and North Africa, which are are close to major markets in Asia and Europe, making them very suitable for the production of green hydrogen. After some investigation, we discover that the current layout of green hydrogen among the five countries in the Middle East and North Africa are so massive that is far beyond our imagination.
Green hydrogen investment scale in the Middle East and North Africa:$1 billion, Egypt $83.45 billion, Oman $55.41 billion, Morocco $16.85 billion, Saudi Arabia $13 billion, and the United Arab Emirates $12.08 billion&; these are just the initial investments of the five countries in Central and Northeast Africa in the field of green hydrogen production. and these five countries alone already reach over $180 billion investments, which is equivalent to 1.3 trillion yuan!
1. Oman's hydrogen investment ranks first in the Middle East
Oman, located in the southeast coast of the Arabian Peninsula, covers an area of 309500 square kilometers, which is about the same as China's Qinghai Province, with a population of only 5 million, about the same as the population size of Nanchang City.
However, it is such a small Middle Eastern country that is brewing unimaginable hydrogen energy ambitions. According to the new report entitled Renewable Hydrogen in Oman: Producer Economy in Transition issued by the International Energy Agency (IEA), Oman will become the largest hydrogen exporter in the Middle East and the sixth largest hydrogen exporter in the world by 2030.
Oman's goal is to produce at least 1 million tons of renewable hydrogen annually by 2030, 3.75 million tons by 2040, and 8.5 million tons by 2050. These will exceed the total hydrogen demand in Europe today. In terms of energy equivalent, the hydrogen production target by 2040 will account for 80% of Oman's current liquefied natural gas exports, and by 2050, this target will have to double again.
In order to achieve a production capacity of 1 million tons of green hydrogen by 2030, Oman will invest approximately $33 billion in this project, and an additional $4 billion is needed to increase the share of renewable energy in the national electricity structure to 20%.
By 2030, Oman's ammonia export capacity will increase by 20 to 30 times and require approximately 50 terawatt hours of electricity& Flash; This is already higher than the country's current power generation capacity in order to achieve its hydrogen energy goals.
Oman's Green Hydrogen Plan is not just a talk. So far, the country has 1500 square kilometers of land have been reserved for the development of hydrogen energy projects until 2030.
The key is that the analysis in the IEA report indicates that Oman can achieve this major goal economically and efficiently. That is, by 2030, renewable energy will account for 20% of the country's electricity structure, and by 2040, it will reach 39%.
Achieving its goals and using one-third of green hydrogen for household use will make a significant contribution to Oman's clean energy transformation. The report states that the Omani people will reduce their annual use of natural gas by 3 billion cubic meters, thereby reducing carbon dioxide emissions by 7 million tons.
Currently, oil and natural gas account for approximately 60% of Oman's export revenue, while domestic natural gas accounts for over 95% of the country's electricity generation.
On June 22 this year, Oman Hydrogen signed an agreement to develop two $10 billion green hydrogen projects each. Hydro m is a subsidiary of Oman Energy development Company, which was established in December 2020 at the request of Sudan and focuses on the development of the country's energy industry.
The first agreement was signed by POSCO-ENGIE (MESCAT Middle East DMCC) consortium and other consortium partners, including Samsung Engineering Company, Thailand National Petroleum Company PTTEP, South Korean utility company Korea East West Power Company and South Korean Southern Company.
Another green hydrogen transaction was signed with the Hyport Duqm consortium. The consortium is composed of international contractors and developers DEME headquartered in Belgium, as well as Omani Energy Company OQ.
The annual production capacity of these two projects is expected to reach 250000 tons of green hydrogen or equivalent to 6.5GW of renewable energy.
In early June, Hydro signed three agreements granting Oman the first green hydrogen block, with a total investment expected to exceed $20 billion.
2. Green hydrogen potential in the Middle East
The Middle East has a unique position as a future center for green hydrogen exports. It not only benefits from abundant resources for large-scale production of green hydrogen, but also has superior conditions for exporting hydrogen to major demand centers in Western Europe and Northeast Asia.
Although people are interested in the potential of the Middle East to become a hydrogen power and many hydrogen projects have been announced in the region, a comprehensive strategy has not yet been announced, although most countries are developing their own hydrogen plans.
What are the largest Arab investors in the green hydrogen field? In addition to Egypt and Oman, the following are some well-known Arab countries that have shown interest in green hydrogen and have the potential to become important investors in this field:
Saudi Arabia: The Saudi Arabian government has announced plans to invest in green hydrogen production as part of its long-term energy strategy. The country's abundant renewable energy resources, including enormous solar potential, make it an ideal location for green hydrogen projects.
United Arab Emirates: The UAE is famous for its investment in renewable energy, especially solar energy. The country has expressed interest in green hydrogen and is exploring various projects and partnerships to develop its Hydrogen economy.
Qatar: It is one of the world's leading natural gas producers and exporters. The country has also shown interest in green hydrogen and is exploring opportunities to produce hydrogen from renewable energy sources such as solar and wind energy, in addition to natural gas reforming through carbon capture.
Kuwait: The Emirate has been considering investing in renewable energy and expressed interest in green hydrogen as a potential solution to reduce Carbon footprint. The government plans to achieve energy diversification and explore opportunities for hydrogen production.
Bahrain: We have been focusing on renewable energy and exploring the potential of green hydrogen. Bapco has shown interest in investing in green hydrogen projects.
Arab countries have abundant renewable energy sources, especially solar and wind energy. These resources provide a sustainable and abundant source of electricity that can be used to produce green hydrogen and ammonia through electrolysis.
In addition, there are geographical advantages as Arab countries are strategically located in regions with favorable renewable energy generation geographical conditions. The vast deserts, strong winds, and sunny climate make these countries ideal choices for large-scale renewable energy projects. However, harsh weather conditions such as sandstorms can also affect the efficiency of photovoltaic power generation.
A pipeline crossing the Mediterranean to transport abundant hydrogen supply from the Middle East and North Africa to Europe may sound fanciful and cost-effective, but a new study has found that such a project is feasible.
According to a landmark study by global consulting firm AFRY Management Consulting, connecting low hydrocarbon supplies in Europe and the Middle East through deep-sea pipelines is not only feasible, but also can unleash the region's huge green energy potential.
The proposed pipeline will depart from Qatar, pass through Saudi Arabia and Egypt, enter Europe through the Mediterranean, and then be distributed in Central European countries.
The report states:; The current discussion around exporting hydrogen and its synthetic products from the Gulf to Europe mainly revolves around ship transportation, but bulk transportation may not be the most effective& Rdquo;
The pipeline configuration can transport approximately 2.5 million tons of green and blue hydrogen annually, with a cost of approximately 1.2 euros per kilogram. This means that starting from 2030, the initial potential (LCODH) sales price for Gulf producers is 2.7 euros per kilogram, and in the long run ?400 kilometer route, then cross the land to reach Riyadh and continue along the Red Sea route to NEOM. Then, the pipeline will cross the seabed into Egypt and leave Sinai Peninsula at Port Said.
Another report from the company states that by 2050, the global green hydrogen market will reach $700 billion, and the Middle East green hydrogen market will experience a great boom in the coming decades. Middle Eastern countries are already competing around green hydrogen. Saudi Arabia and the United Arab Emirates both position themselves as leaders. Last year, Saudi Arabia announced the establishment of a strategic green hydrogen development alliance with Germany to produce, process, use, and transport clean hydrogen, which represents a major step in Saudi Arabia's efforts to increase green hydrogen production.
In the United Arab Emirates, a green hydrogen project was launched in Dubai in 2021 in Muhammad&Middleot; Ben· Rashid· Al Maktoum Solar Park was completed. This project, in collaboration with the Dubai Electricity and Water Authority, the 2020 Dubai World Expo, and Siemens Energy, is the first solar powered green hydrogen energy project for hydrogen production facilities in the Middle East and North Africa region.
Similarly, in the United Arab Emirates, energy policy makers have teamed up with the Netherlands to promote hydrogen energy research and efforts.
Saudi Arabia's super project NEOM is a major green hydrogen investment case. The project completed a financing of $800 million in May this year for the production of green hydrogen based ammonia. The transaction involves Air France purchasing green ammonia at an agreed price for a period of 30 years.
While promoting green hydrogen energy, the Middle East and North Africa region has held the largest climate event for two consecutive years. In 2022, Egypt hosted the Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC) (COP 27). This year, the United Arab Emirates will host COP 28, putting the environmental theme at the top of the regional economic and Political agenda.
