Green hydrogen industry projected to reach USD 700 billion by 2050
Arthur D. Little sees greater interest in green hydrogen among Middle East policymakers and industrial players, according to their latest report. Entitled Paving the way for green hydrogen: Key considerations for green H2 deployment, the document examines the role green hydrogen will have in the future, elaborating on promising use cases and the next steps needed for successful deployment.
The report indicates three conditions necessary for the success of green hydrogen generation projects: cost-competitive production, reliability of production and supply, and hedging of risks to attract investors. Potential hydrogen demands are also examined, while decision-makers are provided with valuable opportunities analysis, risk limitation, and other risks and conditions related to policies and infrastructure.
Although ambitious targets are now being pursued through related projects, the possibilities that accompany the green hydrogen economy depend on several conditions across policy, supply, infrastructure, and demand.
“Decarbonization has been raised again on top of world’s agenda and countries are actively seeking to lower emissions and transition to clean energy sources,” explained Carlo Stella, Partner at Arthur. D Little Middle East. “Green Hydrogen has been identified as a key technology to bridge decarbonization ambitions, if the basic conditions and some pressing requirements are met in the short term.”
Many governments in the Middle East, especially Saudi Arabia and the United Arab Emirates, are currently exploring opportunities that can be exploited in this field, as green hydrogen helps reduce economic dependence on hydrocarbons and contributes to economic development and diversification of energy supply. Furthermore, foreign policy and bilateral agreements are also reinforcing the green hydrogen economy’s importance.
Already in 2021, Saudi Arabia has announced a strategic green hydrogen development alliance with Germany to generate, process, use, and transport clean hydrogen, representing a significant stride as the Kingdom seeks to produce greater volumes of green hydrogen. Similarly in the UAE, a green H2 project was inaugurated at the Mohammed bin Rashid Al Maktoum Solar Park in Dubai in May 2021. In collaboration with Dubai Electricity and Water Authority, Expo 2020 Dubai, and Siemens Energy, the project is the first solar-driven green hydrogen producing facility in the Middle East and North Africa region.
While many locations have no shortage of single renewables sources, few are currently capable of meeting minimum requirements in terms of multiple sources.
“Although green hydrogen projects are being pursued and more investments finalized, this momentum can only continue if thriving conditions are secured in the areas of policy, supply, infrastructure, and demand,” concluded Stella. “Through a collective effort based on transparency, collaboration, and innovation, interested parties can deliver on companies and countries decarbonization commitments, successfully deploying green hydrogen to usher in a new chapter of renewable energy transformation.”