Saudi Arabia Leads Global Green Hydrogen Charge

A team of international experts has examined Saudi Arabia's potential in green energy, specifically hydrogen. They've discovered that while the country is gradually shifting from initial research to larger-scale projects in this field, it still faces significant structural hurdles to becoming a leading hydrogen producer globally.

The researchers noted that Saudi Arabia is investing more in green hydrogen, with total investments reaching approximately $900 million. Despite these efforts, the nation's economy and energy sector continue to rely heavily on oil. Oil and gas are central to Saudi Arabia's economy, contributing to about half of its GDP, 70% of government revenue, and a staggering 90% of export earnings.

In 2020, Saudi Arabia initiated its National Hydrogen Strategy, targeting to become a significant hydrogen exporter. This aligns with its Vision 2030 plan, which aims for renewable energy sources to produce half of the nation's electricity by 2030.

Experts have evaluated Saudi Arabia's prospects in hydrogen energy, focusing on various forms like green, blue, grey, and turquoise. The country's current approach emphasizes blue hydrogen, produced from natural gas using carbon capture, and green hydrogen, created from wind and solar power.

The strategy includes producing 1.2 million tons of green hydrogen annually and meeting 10% of the global hydrogen demand by 2030. The Saudi Arabia Public Investment Fund (SAPIF) is also financing international energy projects, including a $5 billion venture in NEOM, Saudi Arabia, for a green hydrogen-based ammonia production facility. This facility is expected to produce 650 tons of green hydrogen daily with a 1.2 GW capacity.

Saudi Arabia's high solar radiation and vast land area offer a potential advantage in hydrogen production, potentially leading to some of the world's lowest costs for solar photovoltaic (PV) energy.

However, the scientists pointed out several structural and local challenges. These include high initial costs, limited scale economies, expensive electrolyzers, scarce water resources, insufficient incentives, low demand, fossil fuel reliance, regulatory and infrastructural gaps, a small domestic market, and political instability.

They suggest that the government should create a comprehensive regulatory framework for green hydrogen production and distribution, along with investing in necessary infrastructure. Addressing the infrastructural challenges related to the transportation, storage, and distribution of green hydrogen is crucial for the industry's growth in Saudi Arabia.

The scientists have laid out a detailed roadmap to transform Saudi Arabia into a hydrogen powerhouse, focusing on six key areas: developing a solid policy framework, constructing necessary infrastructure, fostering a research and development environment, stimulating demand, expanding capacity, and promoting collaboration among all stakeholders.

Achieving these goals could position Saudi Arabia as a hydrogen exporter between 2030 and 2035, with an additional boost in its green energy capabilities in the subsequent five years.

To realize this vision, the emphasis should be on ramping up Saudi Arabia's green hydrogen exports, particularly targeting markets in Asia and Europe. The researchers advise the government to forge alliances with countries transitioning to renewable energy, especially those with a growing hydrogen demand.

The experts concluded that Saudi Arabia holds a particularly advantageous position in the global green hydrogen sector. They emphasized that green hydrogen production is not just a passing trend but a significant part of the ongoing shift toward decarbonization. In this global movement, Saudi Arabia has a unique opportunity to emerge as a leader in green hydrogen production, thereby playing a crucial role in the worldwide initiative to combat climate change.