Plans are on for a multibillion-dollar hydrogen facility on Saudi Arabia’s northwestern coast, as the world’s largest oil exporter wagers on becoming the world’s largest generator of the clean energy source.
If the new facility achieves its daily aim of 650 tonnes of ecologically beneficial ‘green’ hydrogen, it will become the largest in the world. The plant’s large-scale construction has not yet begun on the proposed city of Neom on the Red Sea coast. The Financial Times said that production would begin in 2026.
Saudi Arabia’s attempt to monopolize hydrogen production is part of an effort to diversify its oil and gas-dependent economy and create jobs. With about 60%, or $149 billion, of the Saudi budget dependent from oil in 2021, the kingdom’s revenue streams must diversify as global demand for fossil fuels evolves.
With Russia and the UAE among the other countries vying for a piece of the market, some doubt that the Red Sea project will deliver on Riyadh’s hopes. In comparison to oil, so-called ‘green’ hydrogen — the most carbon-neutral option involving water and renewable energy — can be created anywhere. If the market grows at the predicted rate — $600 billion by 2050 — economists predict heated competition.
For decades, hydrogen has been heralded as a viable alternative to fossil fuels, capable of meeting up to 12% of the world’s energy demands by 2050, according to the International Renewable Energy Agency’s newest research. Hydrogen may be utilized to power automobiles, industrial processes, and even to heat and power homes.
Green hydrogen, produced by splitting water with renewable electricity, is the most environmentally beneficial kind. Saudi Arabia’s northern coasts boast year-round sunshine and consistent breezes that might power solar panels and windmills. Blue hydrogen is produced by splitting the methane molecule in natural gas and collecting the carbon, and Riyadh has stated that it will dedicate a gasfield to the process.
The Red Sea hydrogen plant is a joint venture between Air Products of the United States, Saudi ACWA Power, and the Neom firm. It was signed in 2020. However, the Public Investment Fund, the $500 billion sovereign wealth fund chaired by Crown Prince Mohammed bin Salman, is the principal engine of Saudi Arabia’s green efforts.
