Saudi Arabia’s drive to become a leading exporter of green ammonia advanced with a new agreement between Larsen & Toubro’s renewables business and ACWA Power for the Yanbu Green Ammonia Project.
The memorandum of understanding gives L&T responsibility for developing the project’s renewables and grid systems, which include utility-scale solar photovoltaics, onshore wind generation, battery energy storage, substations and transmission infrastructure. The collaboration is designed to optimize the configuration of these assets and establish performance benchmarks before an engineering, procurement and construction contract is finalized.
Yanbu has been conceived as a fully integrated hydrogen-to-ammonia complex powered entirely by renewable energy. Plans call for roughly 4 gigawatts of electrolysis capacity capable of producing about 400,000 metric tons of hydrogen annually, which would then be converted into more than two million tons of ammonia for export. Commercial operations are scheduled for the end of the decade, positioning the site as one of the largest of its kind worldwide and a key component of Saudi Arabia’s hydrogen strategy.
The scope of work outlined in the memorandum highlights a core challenge: integrating large volumes of variable solar and wind power with the constant energy demand of electrolysers. Matching intermittent resources to a continuous process requires extensive storage or overcapacity, both of which have cost implications. Designing substations and high-voltage transmission to stabilize output adds another layer of complexity, as does coordinating desalination for electrolysis water with the overall energy balance. These considerations will be central to whether the project can meet its levelized cost targets for hydrogen and ammonia.
Front-end engineering already under way for the hydrogen and ammonia units must be matched by equally detailed planning for power generation, storage and grid elements to avoid mismatched specifications or delays. Phased build-out of the renewables portfolio could provide flexibility, allowing parts of the system to come online early while lessons are incorporated into later stages. Managing costs and delivery schedules will also depend on developing a resilient supply chain, potentially with regional content for key components, and ensuring that local technical capacity is available as construction ramps up.
Stay updated on the latest in energy! Follow us on LinkedIn, Facebook, and X for real-time news and insights. Don’t miss out on exclusive interviews and webinars—subscribe to our YouTube channel today! Join our community and be part of the conversation shaping the future of energy.
