As the world is quickly being plunged into economic disaster, the war between Russia and Ukraine is putting pressure on the entire financial system that relies on petrodollars.
Wanting to stay ahead of the game, the Kingdom of Saudi Arabia is building a $5 billion hydrogen plant in a bid to produce green fuel.
The new initiative is important for Saudi Arabia, as the world moves towards phasing out dependence on fossil fuels, and petrostates are estimated to lose $13 trillion by 2040, due to climate-change targets.
The Helios Green Fuels plant will be run on solar and wind, perfect for the sun-scorched country. Helios is estimated to overtake some of the world’s biggest green hydrogen producers. The Saudis have a plan to open a mega-city named Neom in 2025, where the plant is located.
The former chief executive officer of energy company RWE AG in Germany, Peter Terium, has been given the task of developing the mega-city which will be powered on renewable energy.
“There’s nothing I’ve ever seen or heard of this dimension or challenge,” Terium said. “I’ve been spending the last two years wrapping my mind around ‘from scratch,’ and now we’re very much in execution mode.”
The former CEO joined Neom in 2018, and was in charge of designing the new cities energy, water and food networks.
Some speculated that Neom’s $500 billion price tag would prevent the project from going ahead but the hydrogen plants success doesn’t rely on the success of the newly proposed city.
To develop and build the plant – the Saudis partnered with ACWA Power, partly owned by the Kingdom’s sovereign wealth fund and a Pennsylvania-based $58 billion company – Air Products and Chemicals Inc., located in Allentown.
Costs will be split between the investors and it is expected that Helios would use four gigawatts of solar and wind power.
“As the first gigawatt plant, we will have an advantage in developing further innovation,” Terium said. “This is not going to be the end of the game.”
The new hydrogen plant could produce almost 650 tons of hydrogen per day by electrolysis, around 1.2 million tons of green ammonia per year.
Air Products is expected to buy back that ammonia and convert it back for customers.
A planned investment into infrastructure in consumer markets would cost around $2 billion, and it would largely focus on industrial vehicles and public buses.
“We’re not going to wait until this project comes on-stream in 2025 to think about additional capacity,” said Simon Moore, the company’s vice president of investor relations.
Industry experts have named Saudi Arabia as the country that could take the top spot in the future global hydrogen market. The Kingdom has set its sights on becoming the world’s largest hydrogen supplier – estimated to be worth as much as $700 billion by 2050.
The industry doesn’t come without risks, however, as hydrogen is expensive to make without greenhouse gasses, it is highly combustible and difficult to store – currently it is priced at just under $5 for a kilogram to produce according to the International Renewable Energy Agency.
But with the natural constant sunshine and wind, Saudi Arabia is in a position to take the lead and keep the lead on the emerging global market.
A day late and a dollar short as usual. While the brandon maladministration and the green raw deal crowd are attempting to force everyone in to the modern version of your great grandmother’s electric vehicle, the Saudies are working on technology to maintain their dominant position in the energy sector.
“hydrogen is expensive to make, it is highly combustible and difficult to store” It is not expensive to make when produced through electrolysis utilizing electricity generated from green sources. We store and transport other highly combustible gasses around the globe every day, SO WHAT”S THE DRAWBACK to hydrogen?
So while our government is all in on nineteenth century technology, Saudi Arabia is developing a twenty first century economy.