UAE and Saudi Arabia rely on green hydrogen to restructure economy

In a document for internal use, Siemens Energy examined the factors that make doing business in the Middle East profitable.

A power plant is required since 50 million people in the Middle East still lack access to energy. Technologies for decarbonization are required by the oil and gas sector. Europe can assist Gulf oil producers in securing important roles as suppliers of energy.

The largest single-scale solar thermal complex in the world, located in the Emirate of Dubai, has been producing environmentally beneficial hydrogen since 2021. The installation of the Dubai solar project was done in association with Siemens Energy.

Green solar hydrogen

According to Dietmar Siersdorfer, managing director of Siemens Energy for the Middle East and the United Arab Emirates, Dubai uses wind and solar energy to create its own hydrogen as a form of green electricity. The process was advised by Siemens Energy. Siersdorfer is confident that Siemens Energy will be awarded the lucrative project once the hydrogen production project gets underway. Later on, the Siemens Energy turbine, which is currently gas-powered, will be hydrogen-powered.

Particularly the United Arab Emirates have grand plans. In the United Arab Emirates, work is still being done on a major solar power facility. The required finances are provided by the Abu Dhabi State Energy Company (TAQA), the sovereign wealth fund Mubadala (Mubadala Investment Company PJSC), and the Abu Dhabi State Oil Company (ADNOC).

Insiders claim that Germany, especially Uniper and RWE, is Abu Dhabi’s primary target market for its green hydrogen. Germany and the United Arab Emirates have not yet inked a deal, though.

Neom City is a project to restructure the Saudi economy by 2030. It has a population of 1.5 million, various industrial technology complexes, and businesses that are planned to function entirely with renewable energy. Currently, less than 1% of the electricity produced in Saudi Arabia comes from renewable sources. By 2030, Saudi Arabia wants this ratio to reach 50%.

Neom City hydrogen research center

“The cheap cost of solar and wind energy was the first wave of the energy transformation. Now that the second wave has passed, the industry can only be decarbonized with hydrogen. The plan’s focal point is only a short drive from Neom Community 1. With a capacity of 2,000 megawatts, it is the largest hydrogen producing facility in the world (MW).

The initial production line and the foundation work are already visible. In 2025, the factory is expected to be finished. This is the first step in the process of occupying the $700 billion global market for hydrogen manufacturing.

Thyssenkrupp, a German company, is anticipated to play a significant role. A hydrogen electrolysis facility being built by Thyssenkrupp will cost close to 1 billion euros. This is the biggest to date and will help Thyssenkrupp solidify its position on the world stage for emerging technologies.

Officials from Thyssenkrupp appeared cautious about their operations in the Gulf. It was a setting where formal remarks were avoided. Relations with the Saudi royal family involve more than just difficult moral questions. Future construction of a technology field is planned by the Saudi royal family. He is particularly interested in being actively involved in the study and advancement of hydrogen technology. Therefore, cooperation in hydrogen technology research and development with Saudi Arabia is a benefit that Thyssenkrupp and other German firms do not want to give up.

At the southernmost point of Neom City, on the Red Sea coast, Saudi Arabia is constructing its own hydrogen research facility on a sizable innovation complex. Excavators are preparing the ground for a completely automated port that will be near to the Suez Canal at the largest floating industrial complex in the world.

Saudi Arabia must make the switch from being a hydrogen powerhouse to an oil powerhouse. The Saudi Arabian government is, however, seriously considering building a gas pipeline from the Middle East to Europe.