Will the world’s largest oil region become a hydrogen hub?

The world’s largest oil-exporting region, the Middle East, aims to become a major exporter of clean green hydrogen energy. The biggest oil producers in the Arabian Gulf have jumped on the hydrogen bandwagon – especially its so-called green variety produced from electrolysis of water using solar or wind electricity – such as gaining momentum with governments and the world’s largest international oil companies.

Hydrogen is expected to play a leading role in reducing carbon emissions from energy intensive industries. And the Middle East does not want to miss this opportunity.

On the one hand, he wants to show the whole world that he can export clean energy – not just 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 move away from oil.

Last week, two announcements of green hydrogen projects in the Middle East made headlines: Dubai launched the region’s first industrial-scale green hydrogen project, while Oman announced its intention 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 installation in the Middle East and North Africa in collaboration with Siemens Energy, Dubai Electricity and Water Authority (DEWA) and Expo 2020 Dubai.

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During the day, the plant uses part of the photovoltaic electricity of the Mohammed bin Rashid Al Maktoum solar park to produce green hydrogen by electrolysis. At night, green hydrogen is converted into electricity to supply the city with sustainable energy, explains Siemens Energy.

The solar park is expected to generate up to 5 gigawatts (GW) of clean energy by 2030 as the world’s largest single-site solar park.

Companies in the region, international technology partners and analysts believe that Dubai and the entire Middle East have a bright future in solar power generation, given the abundance of sunshine in the region.

“Against the backdrop of low electricity costs 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 opportunities for energy export for areas with access to an abundance of renewable energy. energies, ”said Siemens Energy.

UAE could become an exporter of hydrogen, said Christian Bruch, CEO of Siemens Energy, Dan Murphy of CNBC in a interview this week.

“I think it has to be, it will be, it should be, one of the future key business models in the UAE and the wider region, to also be, in the future, an energy exporter to the world. “Bruch told CNBC.

Another Middle Eastern oil producer, Oman – not a member of OPEC but part of the OPEC + alliance – also made a major announcement regarding green hydrogen this week.

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Oman’s state energy company OQ, Hong Kong-based green fuel developer InterContinental Energy and Kuwaiti government-backed clean energy investor and developer EnerTech have announced a plan to one of the largest facilities of green hydrogen in the world. The plant will be powered by 25 GW of renewable energy and could cost up to US $ 30 billion.

“Considering the site’s strategic location between Europe and Asia, as well as the excellent solar irradiance and wind resources facing the Arabian Sea, the development is well placed to provide a secure supply and reliable green fuels on a global scale at a very competitive price ”, InterContinental Energy mentionned.

“Alternative energies are a key driver of OQ’s long-term growth and a cornerstone of its strategy. It is also in line with the country’s ambitious Oman Vision 2040 which aims to diversify the country’s resources and maximize the resulting financial value, ”said Salim Al Huthaili, CEO of Alternative Energy at OQ.

The region’s largest oil producer and the world’s largest exporter of oil, 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, sign Last year, a deal with Air Products and Saudi ACWA Power for a $ 5 billion green hydrogen ammonia project, which will export the product.

All of these plans suggest that the Middle East oil powerhouse is not immune to the energy transition and growing global demand for clean energy products.

By Tsvetana Paraskova for OilUSD

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