In a study, the German Aerospace Center, the Wuppertal Institute, and the Institute of Future Energy and Material Flow Systems (IZES) examine the potential contribution of the Middle East and North Africa to the supply of hydrogen and synthetic fuels made from renewable sources to Germany and Europe.
The findings demonstrate the MENA region’s immense potential and its ability to produce goods at a reasonable cost. In addition to renewable resources, investment risks—and consequently a variety of boundary conditions in potential exporting countries—have a considerable impact on production costs. Synthetic fuels are crucial for achieving aggressive climate protection goals and lowering CO2 emissions in the transportation sector. They are created by combining carbon from the air with renewable energy sources like electricity and hydrogen.
Regionally high-resolution data on technical potential, production costs, and investment climate are merged for the first time
For this study, the researchers performed a first-ever high-resolution analysis of the whole MENA region. They divided the region into numerous smaller portions for this reason, and then they assessed each one separately. Another innovation is that the authors’ calculations now take into account a model of the whole synthetic fuel manufacturing process. Systems for storing energy and hydrogen were also examined. They are important and useful for maintaining the stability and economic efficiency of the entire system when using renewable and erratic resources. Unlike prior research, MENA-Fuels considers both technological and economic factors when evaluating the hazards specific to each of the 17 countries in this region. Resource assessments, political framework analyses, and investment framework analyses were all incorporated for this reason. Jürgen Kern, project manager for the Study at the DLR Institute of Networked Energy Systems, says, “For the first time, we have a thorough study – as a basis for additional research work, but also as a source of information and basis for decision-makers in industry and politics.”
Germany’s fuel needs could be many times greater than what is produced
The MENA region has a very high potential for the development of renewable energies, with an annual total of more than 400,000 terawatt hours. This is especially true when using solar energy for photovoltaics and solar thermal energy conversion (CSP). Synthetic fuels and hydrogen production have significant potential. This holds true even after accounting for the MENA countries’ long-term domestic needs for a full switch to renewable energy. The export potential might outpace Germany’s need for synthetic fuels by 60 to 1,200 times, depending on the development scenario adopted (negative, cautious, or positive).
Significant potential for the generation of synthetic fuels at less than two euros per liter
The capacity to manufacture synthetic fuels at minimal cost is present in almost all MENA nations. Production costs in the most advantageous sites could range from 1.92 to 2.65 euros per liter in 2030 and from 1.22 to 1.65 euros per liter in 2050. For these numbers, the researchers predicated medium-range investment costs and a favorable evolution of the economic environment. Even under unfavorable investment conditions, the export potential of synthetic fuels, which might be manufactured for less than two euros per liter, comes to over 28,000 terawatt hours in 2050. In this instance, it would primarily originate from nations with strong technical potential and stable political environments. The annual export potential would be greater than 50,000 terawatt hours if favorable investment circumstances emerge.
Potential export regions are determined by the investment climate
But in order to assess export potential, it is important to consider both the investment climate and production costs. This has a considerable effect on the overall expenses and thus on the potential choice of exporting nations when taking into consideration potential investment hazards.
The broad deployment of renewable energies in the MENA region itself is a requirement in any scenario for the export of synthetic fuels. The projections for solar and wind power generation capacity for their own, entirely renewable supply by 2050 range from 4,500 to 9,000 gigawatts. The expansion targets of the majority of MENA countries currently do not take into account such orders of magnitude and the requisite expansion dynamics. The rise of renewable energies would also require a major increase in the industrial-scale expansion of synthetic fuel production facilities. Exports and domestic supplies should ideally work in tandem to strengthen one another.
