Acwa Power, which is building a $5 billion green hydrogen-based ammonia production plant in Neom, Saudi Arabia, aims to “replicate” the project overseas.
Andrea Lovato, worldwide head of hydrogen at Acwa Power, told The National that “huge capacities” of the fuel are needed to satisfy an anticipated increase in demand.
2020 saw the signing of a $5 billion deal by Acwa Power, US-based Air Products, and Neom for the construction of the “world’s largest” green hydrogen-based ammonia manufacturing facility in the $500 billion future city of the kingdom.
According to the firms at the time, the green hydrogen project at Neom will use 4 gigawatts of renewable energy from solar, wind, and storage to produce 650 tonnes of hydrogen per day through electrolysis using equipment supplied by the German company ThyssenKrupp.
About 1.2 million tonnes of green ammonia will be produced annually by the plant, which is scheduled to begin operating in 2025.
In order to build a multibillion-dollar green hydrogen-based ammonia production facility in Oman’s Salalah Free Zone, Acwa Power once again partnered with Air Products and Oman’s OQ energy company.
In October, the business teamed up with the financing organization Industrial Development Corporation of South Africa to build projects on green hydrogen and its derivatives worth $10 billion in the continent’s second-largest economy.
In July of last year, Acwa Power also collaborated on the development of green hydrogen with Posco Holdings, the holding company for the Posco Group of South Korea.
In order to decarbonize Posco’s power generating and steel manufacturing processes, the entities also announced at the time that they would develop green hydrogen derivatives, such as green ammonia.
According to the International Energy Agency, 520 million tonnes of hydrogen will be required globally to reach net-zero goals by 2050.
By 2030, investments in hydrogen are expected to surpass $300 billion, according to French investment bank Natixis.
The bottleneck will be the amount of equipment and electrolyzers required to build all of this capacity. Everyone is investing in hydrogen at the moment, Mr. Lovato said.
As economies and industries transition to a low-carbon world, hydrogen, which is created from renewable energy and natural gas, is projected to play a crucial role as a fuel.
It comes in several colors, such as blue, green, and grey. Natural gas is used to create the colors blue and gray hydrogen.
According to Mr. Lovato, the manufacturing of green hydrogen, which is created by electrolyzing water, will necessitate “trillions of dollars” in investments along with expanding collaboration with nations that have access to renewable energy.
Given the growing investment in infrastructure and the presence of suppliers from around the world, the Middle East, which is rich in renewable energy sources, has “great potential” when it comes to the generation of green hydrogen, he said.
As more capacity comes online, the Acwa Power CEO anticipates that in seven to ten years hydrogen will be traded on the market.
According to Mr. Lovato, the market for hydrogen is developing similarly to the market for liquefied natural gas, with significant projects and long-term off-take agreements.
The “liquid market” for clean fuel, however, might develop in the following ten years, according to him.
The Group of Seven industrialized economies might be “front runners” in the use of green hydrogen, according to the International Renewable Energy Agency last year, but it also cautioned that using the fuel excessively could delay the energy revolution.
According to Mr. Lovato, the fuel will “grow alongside” renewables as demand rises in challenging industries like steel and aluminum.