Why the UAE is 'well placed' to lead hydrogen transition
At the AB Economic Forum in Abu Dhabi on Monday, during a panel discussion entitled 'The energy opportunity', experts agreed that a number of challenges must be overcome before an complete shift from a reliance on oil and gas to hydrogen will be able to take place
Why the UAE is 'well placed' to lead hydrogen transition
Roche van der Merwe, market leader, Defence and Industrials, GHD.
The UAE is “very well placed” to be a senior player in the hydrogen market, according to Roche van der Merwe, market leader, Defence and Industrials, GHD.
However, at the AB Economic Forum in Abu Dhabi on Monday, during a panel discussion entitled ‘The energy opportunity’, experts agreed that a number of challenges must be overcome before a complete shift from a reliance on oil and gas to hydrogen will be able to take place.
The Gulf region overall is aiming to slash annual water use by 16 percent, save 400 million barrels of oil, create close to 210,000 jobs and reduce its per capita carbon footprint by 8 percent in 2030, according to IRENA analysis.
Green hydrogen can fuel the region's future
The UAE aims to cut its emissions by 24 percent by 2030 from 2016 levels – the first country in the region to commit to an economy-wide reduction in emissions.
Describing it as “the new fad” in the world, van der Merwe said that traditional oil and gas organisations are “very well placed” to make the transition to a dependence on hydrogen as a fuel source, “because they have the basic technology, they understand how to deal with hydrogen as a material”.
Last month, Abu Dhabi National Oil Co. announced that it will send a cargo of blue ammonia to Inpex Corp. for use in power generation in Japan – its third shipment of blue ammonia to the country. Fertiglobe, a partnership between Amsterdam-based OCI NV and Adnoc, will produce the fuel in the emirate of Abu Dhabi.
Van der Merwe said: “I believe that the UAE has been quite strategic about watching what the world is doing and deciding when to join the race in moving more towards hydrogen technologies because you want to set a level of maturity in the technology in general before you join.
“You want to try and join the race as late as possible, but still early enough to make a big difference and I believe that the UAE has been quite strategic in picking the time that they’ve started to invest.
AB Economic Forum in Abu Dhabi.
“The biggest challenge across the region is installed capacity. We don’t have the installed capacity both for the feedstock and for the electrolytes and that would take an enormous amount of investment and further development of the technology to accelerate that.
“But I believe the UAE specifically are very well placed to be a senior player in that market.”
Blue ammonia is made from hydrogen, a gas seen as key to the global energy transition since it emits only water vapour when burned. Turning hydrogen into ammonia allows it to be shipped.
Yusuf Macun (pictured below), managing partner, Cranmore, said: “The easiest and cheapest way of getting hydrogen is through pipes and people are talking about pipes from the Middle East to Europe so it’s not impossible. Big, long pipelines have been installed elsewhere.
“Hydrogen is a potential replacement for oil and gas, it’s as stark as that, so that shift is going to take a bit of time.”
While many energy companies are looking to expand in such fuels, they’ve only just started to set up supply chains amid efforts to cut costs, which are far higher than those of traditional oil and gas.
Van der Merwe said: “The key that needs to unlock the industry transition to hydrogen specifically is getting it to a price point level that is relatively competitive. That’s in the range of about $1 to $2 per kilogram of hydrogen and we’re not anywhere close to that.
“First of all we don’t have a regularised marketplace for it now. It’s depending on what your energy cost is for generating the hydrogen. It’s not as if there’s a source that you can drill into and you can extract it and sell it on; you have to physically make the hydrogen.
“I can see that for the foreseeable future will be a major driver for helping that transition.”
The Green Hydrogen Organisation, to be known as GH2, was unveiled in New York last week to coincide with climate and energy discussions between world leaders at the United Nations. The group will seek to engage with governments to establish energy policies that stimulate demand and markets for the fuel, it said in a document.
Dorival Bordignon (pictured above), partner, Energy & Process Industries, Kearney Middle East, remained hopeful over its future adoptions, but cautioned: What are the new uses of hydrogen, in mobility and power and how fast are they going to be adopted because when you see, for instance, the projection for the next 20-30 years, there are clear discrepancies between what IDA or the Hydrogen Council project because it depends a lot on how the cost curve is going to go over time and how the demand side is going to react.
“Mobility is a big thing because there’s a lot of hype around hydrogen vehicles, but the reality is that BMW announced that probably only around 2030 will they have a vehicle that’s commercially viable.”
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