Hydrogen Synthesis: How Does Saudi Arabia Achieve its Targets?
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How Does Saudi Arabia Achieve its Hydrogen Synthesis Targets?

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Hydrogen Synthesis: In 2021, Saudi Arabia initiated development efforts aimed at competing in the clean energy market.

Hydrogen Synthesis: In 2021, Saudi Arabia initiated development efforts aimed at competing in the clean energy market. The Kingdom is pursuing the adoption of the digital carbon economy model.

Moreover, its goal is to reduce emissions by up to 278 million tonnes by 2030 and increase the share of workforce sources in the electricity mix to 50% by the same year. This is in response to the worldwide energy transition movement’s explosive expansion.

The International Energy Agency projects that by 2030, clean energy investments will have increased by up to 50% relative to current rates. Hydrogen energy will also play a larger role in the global clean energy mix due to its sustainable components, which allow it to produce clean, safe energy with low emissions in areas like heavy transportation and industrial activity where emissions are hard to reduce.

On top of that, the best option for producing hydrogen through water electrolysis is “green” hydrogen, which is produced using renewable energy sources like the sun or wind. This method yields the greatest benefits from hydrogen production for energy production while maintaining zero neutrality goals.

Next in line are “blue,” which is made with natural gas while capturing carbon waste, and “grey,” which is made with gas but does not capture those wastes. “Black and brown,” which are both made with coal, “pink,” which is made with nuclear energy, and “white,” which is made naturally.

Saudi Arabia’s Goals in the Hydrogen Sector

In line with Saudi Vision 2030, the Kingdom unveiled an ambitious national strategy in 2020 intending to make Saudi Arabia a major producer of this low-carbon fuel by the end of the current decade.

Besides, the main method for achieving this will be the creation of green and blue hydrogen, which are the most effective at reducing carbon emissions, but are also the most challenging to produce due to the high demand for renewable energy.

The Saudi Public Investment Fund (PIF) is a key part of the Kingdom’s strategy to promote hydrogen as a prototype alternative energy source. The Fund aims to enhance the Kingdom’s global hydrogen production hub status, generate sustainable investment returns, and help achieve zero neutrality targets by 2050 and 2060.

Utilising solar energy to produce green hydrogen that will eventually be available on both domestic and foreign markets in the future, the Fund’s vision for the sector integrates all stakeholders involved in clean energy production.

Plus, through several significant initiatives and projects across its network of affiliated companies, the Fund is pursuing this course. NEOM Green Hydrogen, one of the key projects in the Fund’s portfolio, NEOM has started building the largest green hydrogen plant in the world, with an estimated total value of $8.4 billion. About 4 gigawatts of solar and wind energy will help the plant produce up to 600 tonnes of carbon-free hydrogen per day.

NEOM Green Hydrogen Company has completed the first batch of wind energy turbines and is currently transporting energy transformers to the wind energy station for assembly and installation. The power plant, which will contain over 250 turbines, will provide energy through a direct electricity transmission network, ensuring a sustainable and efficient energy supply.

NEOM and PIF: A Game-Changer

By 2026, when the plant is fully operational, the company plans to export all the green hydrogen produced—600 tonnes of clean hydrogen per day and up to 1.2 million tonnes of green ammonia annually—to different parts of the world in the form of green ammonia.

This is possible by an exclusive long-term purchase agreement worth $6.7 billion with Air Products, which extends the plant’s 30-year production cycle and mitigates the effects of 5 million metric tonnes of carbon emissions annually.

According to “Bloomberg NEF’s” annual report on energy transition investment trends, the financial closure of “NEOM Green Hydrogen” turned out as the primary pillar and driver of the region’s strong performance in 2023 at advancing the global clean hydrogen investment movement in Europe, the Middle East, and Africa.

The Public Investment Fund and the Japanese company “Marubeni” signed a memorandum of understanding to develop green hydrogen projects and its derivatives in the Kingdom.

This will increase the Kingdom’s competitive capabilities on the global stage and help it become one of the world’s largest exporters of green hydrogen. The Public Investment Fund is a tributary of the renewable energy sector, which represents one of the sectors in which it invests.

Additionally, the Fund and JERA inked a non-binding memorandum of understanding to investigate prospects for collaboration in the development of green hydrogen projects and their by-products, such as ammonia for export outside the Kingdom.

Furthermore, to strengthen the Kingdom’s active participation in the shift to clean energy, the Fund, and five other Korean partners, including POSCO and Samsung C&T, inked a memorandum of understanding to develop a project to produce green hydrogen using only renewable energy sources for export.

A Sustainable Future for the Kingdom

As part of the Fund’s mission to develop 70% of renewable energy projects in the Kingdom by 2030, it also focuses on solar energy projects, such as the 1.5 gigawatt-capacity Sudair project, one of the largest solar energy plants in the world.

Anticipations suggest that the Public Investment Fund’s all-encompassing strategy will strengthen Saudi Arabia’s ambitions to play a major global role in hydrogen production, as this is an industry with greater potential for economic expansion, the generation of new jobs, and a significant impact on bolstering the global climate action process.

According to the report “Green Hydrogen Market Share, Size, and Trends,” published by the American market research and analysis company Polaris Market Research, the hydrogen market will grow at a compound annual rate of roughly 4% until the year 2030, with a total value exceeding $58.5 billion.

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