Masdar says Egypt’s abundance of sun and wind “will enable renewable energy production at highly competitive costs – a key enabler for green hydrogen production”.
Ute Grabowsky | photo library | Getty Images
Masdar of the United Arab Emirates and Hassan Allam Utilities of Egypt have signed agreements with Egyptian government-backed organizations for the parties to work together to develop large-scale green hydrogen projects.
In an announcement on Sunday, Masdar – which is owned by Abu Dhabi’s sovereign wealth fund, Mubadala – said the two agreements related to facilities destined for the Mediterranean coast and the Suez Canal Economic Zone.
The projects in Egypt aim for an electrolyzer output of 4 gigawatts by 2030, with an annual production of up to 480,000 tons of green hydrogen.
Described as a “versatile fuel” by the International Energy Agency, hydrogen has a wide range of applications and can be used in sectors such as industry and transport.
It can be made in a number of ways. One method is electrolysis, in which an electric current splits water into oxygen and hydrogen.
When the electricity used in this process comes from a renewable source like wind or sun, some call it green or renewable hydrogen.
While hydrogen’s potential is attracting attention in some circles, the vast majority of its production is currently based on fossil fuels.
“Masdar and Hassan Allam Utilities see Egypt as a hub for green hydrogen production targeting the bunker market, exporting to Europe and boosting local industry,” Masdar said in a statement.
“Egypt has abundant solar and wind resources that enable renewable energy production at highly competitive costs – a key enabler for green hydrogen production,” it added. “Egypt is also in close proximity to markets where demand for green hydrogen is expected to grow the most, providing a robust export opportunity.”
Masdar’s mention of Europe is instructive and illustrates how the hydrogen sector could evolve in the coming years as major economies seek to reduce carbon emissions.
In July 2021, the CEO of Italian company Snam outlined a vision for the future of hydrogen, saying the “nice thing” about it was that it could be easily stored and transported.
Speaking to CNBC’s Squawk Box Europe, Marco Alverà discussed how current systems would be used to facilitate the delivery of hydrogen produced from renewable sources and biofuels.
“Now when you turn on your heating in Italy, the gas flows from Russia, all the way from Siberia, in pipelines,” he said.
“Tomorrow we will have hydrogen produced in North Africa, in the North Sea, with solar and wind resources,” said Alverà. “And this hydrogen can flow through the existing pipeline.”
For its part, the European Union’s executive, the European Commission, has presented plans to install 40 GW of renewable hydrogen electrolyser capacity in the EU by 2030.
In addition to this target, the Commission’s plan also envisages an additional 40 GW “in Europe’s neighbourhood”, which would be “exported to the EU”.
In recent years, numerous companies have commented on the subject of hydrogen.
In a recent interview with CNBC, Michele DellaVigna, head of Goldman Sachs’ commodity equity business unit for EMEA, tried to highlight the important role he believed he would play in the future.
“If we want to get to net zero, we can’t get there just through renewable energy,” he said.
“We need something to take on the role of natural gas today, particularly to deal with seasonality and disruption, and that’s hydrogen,” argued DellaVigna, describing hydrogen as “a very powerful molecule.”
The key, he said, is “to produce it with zero carbon emissions. And that’s why we’re talking about green, we’re talking about blue hydrogen.”
Blue hydrogen refers to hydrogen produced using natural gas – a fossil fuel – with the CO2 emissions produced during the process being captured and stored. There has been a charged debate about the role blue hydrogen can play in decarbonizing society.
“Whether we do it with electrolysis or with carbon capture, we have to produce hydrogen in a clean way,” said DellaVigna. “And once we have it, I think we have a solution that could one day account for at least 15% of the global energy markets, which means it’s going to be over a trillion dollars a year market.”
https://www.cnbc.com/2022/04/26/masdar-signs-deal-for-major-green-hydrogen-projects-in-egypt.html Masdar signs contract for major green hydrogen projects in Egypt