Masdar says the abundance of solar and wind power in Egypt “will enable the production of renewable energy at a very competitive cost – a key enabler for the production of green hydrogen.”
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Masdar of the United Arab Emirates and Hassan Allam Utilities of Egypt have signed agreements with Egyptian state-backed organizations that will see the parties work together on the development of large-scale green hydrogen projects.
In an announcement on Sunday, Masdar – which is owned by Abu Dhabi state fund Mubadala – said the two deals were for facilities for the Mediterranean coast and the Suez Canal Economic Zone.
Projects in Egypt aim for an electrolyser capacity of 4 gigawatts by 2030, with production of up to 480,000 tons of green hydrogen per year.
Described by the International Energy Agency as a “versatile energy carrier”, hydrogen has a diverse range of applications and can be deployed in sectors such as industry and transport.
It can be produced in several ways. One method is to use electrolysis, with an electric current splitting water into oxygen and hydrogen.
If the electricity used in this process comes from a renewable source such as wind or solar, some call it green or renewable hydrogen.
Although some quarters are raving about the potential of hydrogen, 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 bunkering market, exporting to Europe and boosting local industry,” Masdar said in a statement. communicated.
“Egypt benefits from abundant solar and wind resources which enable the production of renewable energy at a very competitive cost – a key enabler for the production of green hydrogen,” he added. “Egypt is also located near markets where demand for green hydrogen is expected to grow the most, providing strong export opportunities.”
Masdar’s mention of Europe is instructive and illustrates how the hydrogen sector could grow in the years to come as major economies attempt to decarbonise.
In July 2021, the CEO of Italian company Snam laid out a vision for the future of hydrogen, saying the “beauty” of it was that it could be easily stored and transported.
Speaking to CNBC’s “Squawk Box Europe,” Marco Alverà explained how current systems would be used to facilitate the delivery of hydrogen produced from renewable sources as well as biofuels.
“Right now, if you turn on your heating in Italy, the gas comes from Russia, from Siberia, in pipelines,” he said.
“Tomorrow we will have hydrogen produced in North Africa, in the North Sea, with solar and wind resources,” Alverà said. “And that hydrogen can travel through the existing pipeline.”
For its part, the executive arm of the European Union, the European Commission, has presented plans to install 40 GW of renewable hydrogen electrolyzer capacity in the EU by 2030.
Alongside this target, the commission’s plan also envisages an additional 40 GW “in Europe’s Neighborhood” which would “export to the EU”.
In recent years, many companies have looked into the subject of hydrogen.
In a recent interview with CNBC, Michele DellaVigna, head of Goldman Sachs’ commodity equities business unit for EMEA, sought to underscore the important role he thinks this will have going forward.
“If we’re going to get to net zero, we can’t do it through renewable energy alone,” he said.
“We need something that takes on the current role of natural gas, especially to deal with seasonality and intermittency, and that’s hydrogen,” DellaVigna explained, going on to describe hydrogen as “a very powerful”.
The key, he said, was to “produce it without CO2 emissions. And that’s why we talk about green, we talk about blue hydrogen.”
Blue hydrogen refers to hydrogen produced from natural gas – a fossil fuel – with the CO2 emissions generated during the process captured and stored. There has been a charged debate about the role that blue hydrogen can play in decarbonizing society.
“Whether we do it with electrolysis or with carbon capture, we have to generate hydrogen in a clean way,” DellaVigna said. “And once we have that, I think we will have a solution that could become, one day, at least 15% of the world’s energy markets, which means that it will be … a market of more than one trillion dollars a year.”