Saudi Arabia Announces construction of Neom’s $5 Billion Green Hydrogen Plant

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Saudi Arabia Announces construction of Neom’s $5 Billion Green Hydrogen Plant

Thu, 03/24/2022 - 09:58
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Red sand dunes and rock formations of Bajdah (@2021 NEOM)
Red sand dunes and rock formations of Bajdah (@2021 NEOM)

Saudi Arabia has announced that it will start the construction of a $5 billion hydrogen plant in Neom this month to produce carbon-free hydrogen anticipated to be export-ready in the next four years to help transition to clean energy. The facility contracted by US-based firm Air Products and Chemicals Inc. will be located at Northwestern Saudi Arabia.

The facility will be built According to the directives given by the head of energy and water for the new region, Peter Terium, ramping up the country’s efforts to sell carbon-free hydrogen from a $5 billion project in Neom by 2026. So far, engineers have flattened the site, and construction will begin as soon as this month.

Hydrogen is seen as a key resource for shifting to greener energy sources. The project is geared towards making Saudi Arabia the biggest exporter of hydrogen, with potential market competition expected between South Korea, Japan, Europe and some regions in the US.

Terium believes that there will probably be demand from US and Asian companies for the exports, but the shipments will be sold to companies that bid the highest price. Hydrogen is believed to be greener and less polluting than other energy sources, including coal, natural gas and oil, because it only emits water vapor during combustion.

BloombergNEF said that the technology for producing carbon-free hydrogen on a large scale is still uncertain. But, if manufacturers could cut down the cost, we could have the market hitting over $700 billion annually by 2050.

State-owned oil firm, Saudi Aramco, is at the forefront of pushing for blue hydrogen manufacture. The project will be led by US-based firm Air Products and Saudi utility ACWA Power International. Blue hydrogen is obtained by converting gas and capturing carbon dioxide emissions.

Air Products and ACWA Power will use 120 Thyssenkrupp AG electrolyzers to split hydrogen from the water. Each of the electrolyzers is about 40 meters long. Once the project is completed, the hydrogen will be transported from Saudi Arabia in ammonia which is easier to transport than hydrogen in its gaseous form.

According to Terium, this plan is enormous and poses challenges from time to time. Wind and solar power of about four gigawatts will be used to power the facility, and it is among the largest under construction globally. The facility site is ideal as it has enough space for the placement of solar panels and wind turbines, besides being open enough for abundant sunlight and wind strength.

Mohammed bin Salman, Yet Crown Prince, has categorized mass hydrogen production as part of his strategy to diversify the economy.

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