Green Hydrogen in Saudi Arabia

The global hydrogen market is expanding consistently with continuous decarbonization efforts. About 1,000 projects have been announced worldwide, and more than 800 of these projects are scheduled to be commissioned by 2030. Saudi Arabia appears to be at the frontline of these projects.

Hydrogen in Saudi Arabia

There are two types of hydrogen. Blue hydrogen comes from natural gas. The other type of hydrogen, green hydrogen, is the most eco-friendly. Green hydrogen is derived from electrolysis using renewable energy sources. Saudi Arabia is well situated to benefit from its early-mover advantage in the production and export of green hydrogen due to its ample solar energy, wind resources, and large landmass. Also, Saudi Arabia’s Vision 2030 seeks to achieve net-zero emissions by 2060 and 50% renewable energy by 2030, with hydrogen playing a key part in this transformation.

National Hydrogen Strategy 

In 2020, the nation introduced its National Hydrogen Strategy with the objective of emerging as a prominent exporter. Aligned with its Vision 2030 strategy, the country has set a goal to derive 50% of its electricity from renewable sources by 2030.

Future Prospects of Saudi Arabia in Green Hydrogen Production

A multinational research team analyzed Saudi Arabia’s economic and technical potential for green energy. The team noted that Saudi Arabia is transitioning from preliminary studies and pilot projects towards more extensive development efforts. 

According to the research, the kingdom has spent approximately $900 million on green hydrogen projects. Nonetheless, they recognized that oil continues to serve as the cornerstone of the nation’s energy sector and economy.

The researchers conducted an assessment of hydrogen’s potential in various forms within Saudi Arabia, encompassing green, blue, gray, and turquoise hydrogen technologies. They observed that the existing hydrogen strategy primarily focuses on blue hydrogen derived from natural gas with carbon capture and storage (CCS) technology. Also, the existing hydrogen strategy focuses on green hydrogen produced with wind and solar electricity.

Saudi Arabia possesses a significant advantage in hydrogen production and usage because of its abundant solar radiation levels. This, coupled with expansive land availability, positions the nation to potentially achieve one of the lowest, if not the lowest, levelized costs of energy (LCOE) for photovoltaic (PV) systems globally.

The researchers identified a range of structural and local obstacles that must be overcome to facilitate the emergence of a hydrogen-based economy in the country. These include high initial capital investments, limited economies of scale, elevated costs associated with electrolyzers, restricted water resources, absence of incentives, and subdued demand. Additionally, they highlighted challenges such as reliance on fossil fuels, insufficient regulatory framework and infrastructure, a constrained domestic market, and political instability.

The researchers recommended some plans. These plans revolve around six fundamental pillars: establishing a stable policy framework, developing infrastructure, fostering an R&D ecosystem, stimulating demand, building capacity, and fostering collaboration among all stakeholders.

Final Words

The adoption of hydrogen and projects, especially green hydrogen, appears to be on the rise. Saudi Arabia is at the forefront of adopting green hydrogen.

Saudi Arabia could potentially transition into a hydrogen exporter between 2030 and 2035 while also maximizing its green energy potential within the subsequent five-year period.

Last Updated on March 19, 2024 by News Editor

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