Energy From Hydrogen

The GCC has major advantages in the production of green hydrogen, due to abundant, low-cost solar energy. But green hydrogen involves significant transportation costs to supply large export markets in Europe and East Asia. For this reason, the green hydrogen market depends on the supply chain, and green hydrogen converted to green ammonia.

Green Hydrogen in the Middle East (GCC)

Across the entire globe, hydrogen is set to become a new medium of choice for producing green energy at a low cost. It has been estimated that new ‘green hydrogen’, produced with low or zero carbon emissions, will be worth around $300 billion in the annual export market by the year 2050. Around 530 million tons will be produced – enough to eliminate the need for 10.4 billion barrels of oil, or around 37% of global oil production.

This new development in energy will provide a promising new prospect for countries in the Gulf Cooperation Council (GCC). While green hydrogen producers like China and the USA have a hefty domestic demand to deal with first, GCC countries have the means to produce vast amounts of green hydrogen for export to the global market, while easily meeting their own countries’ demand.

Hydrogen demand graph

This ‘blue hydrogen’ should be used as a short-term, cost-effective measure during the zero-carbon transition. In the long term, ‘green hydrogen’ will Hydrogen is in wide demand for a number of industrial purposes, mostly for the production of chemicals such as ammonia. Traditionally, hydrogen is produced using large amounts of carbon-emitting fuels, typically natural gas or coal – this is known as ‘grey hydrogen’.

However, new developments in electrolysis technology, and the rapidly falling price of renewable energy – solar, wind and biomass – mean that we now have the means to create ‘green hydrogen’ – produced with no carbon footprint. This will be infinitely more environmentally sustainable.

The other type of hydrogen, ‘blue hydrogen’, uses the same processes as grey hydrogen, except it traps around 90% of its carbon emissions by using carbon-capture technology. These greenhouse emissions are usually stored underground, preventing them from polluting the atmosphere and contributing to climate change. This method of hydrogen production can be used in the transitory stage, as we move to a fully zero-carbon future.

How PEM technology works

Demand for green hydrogen is set to be highest in European and East Asian countries. These regions typically have the highest demand for energy consumption, usually for heating homes and transportation, as well as in the industrial sector. These nations already pay a high cost to import fuel.

Potential to Lead the Green Hydrogen Market

Green hydrogen will not be a substantial challenge to begin producing, as the technology needed is easily accessible. However, the countries of the GCC have a clear advantage to become market leaders, for a number of reasons.

GCC countries have access to very high levels of solar exposure. Solar power plants across this region can receive up to 1,930 hours of operation at full-load per annum, which is double the exposure level that Central Europe can expect.

Furthermore, many regions in the GCC have high wind speeds, above seven metres per second. These areas are ideal for large-scale wind power plants, which can easily supply the grid with the renewable energy needed for green hydrogen.

Many countries in the GCC already have these renewable energy projects underway, permitting developers to construct these large-scale renewable energy plants. These supply some of the world’s cheapest renewable energy, at fewer than 2 cents per kWh.

GCC countries also have large areas of flat, barren land, which is ideal for development into large-scale power plants and electrolysis plants. Only around 1/5 of the barren land in Saudi Arabia could be used to meet green hydrogen’s global demand by 2050. Additionally, the GCC countries are adjacent to the sea, meaning they can easily supply the 5.6 trillion litres of water needed for green hydrogen production by its 2050 demand levels.

Perhaps most importantly, GCC countries have a clear advantage over other, larger economies, such as the USA, China, Brazil and India, as they will not consume most of their green hydrogen production domestically. The GCC has a high production potential, and comparatively a much lower rate of domestic energy consumption.

Hydrogen and decarbonisation

Many of these countries are already planning out their upcoming green hydrogen economies, seeing the potential of it as a fuel that is vital to a zero-carbon future.

The investments needed to meet the export demand for green hydrogen by 2050 are projected to be around $1.2 trillion. This includes $1 trillion for construction of dedicated renewable energy sources, $900 billion for building hydrogen conversion and export facilities, and $200 billion for setting up the water electrolysis facilities.

Seizing the Green Hydrogen Opportunity

Fast action is needed if the GCC governments wish to catch up to other nations already implementing green hydrogen plans.

Strategy&, a global strategy consultancy organisation, have laid out a three-phase green hydrogen plan that GCC nations can take advantage of.

Phase One of this strategy would be for GCC governments to partner with an electrolysis operating company to create a pilot project, at a large-scale. This project would span from 2 to 4 years. By running a pilot project, policy makers can identify their technical capabilities, and take notice of any local environment challenges, all to develop any needed mitigation measures. This would be an ideal first step, as plans can be developed along with real-world applications, rather than relying on hypothetical scenarios.

Phase Two of this plan, spanning from 5 to 15 years, would involve the governments of the GCC developing a comprehensive green hydrogen policy. This policy would take into account lessons learned from the pilot project, which will have proven commercially viable by this time. By implementing this policy, green hydrogen production will be ‘scaled up’, allowing for a new green hydrogen company developed by GCC nations.

<pstyle="text-align: left;"="">Phase Three, taking place at the 16-year-mark and beyond, will see a fully operational green hydrogen industry, ready to export. By this point, technological advances, as well as economies of scale, will even further reduce the cost of producing green hydrogen. At first, exports will primarily consist of industrial products – green polymers, steel, methanol and reduced iron. However, over time, direct energy exports will be possible, by shipping and pipeline channels.

With the world moving away from fossil fuels, green hydrogen represents a vital opportunity for GCC nations to continue their influence in the global energy market.



  • Jack Starr

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