Energy

PIF and Engie to collaborate on green hydrogen

July 13, 2023

Frédéric Claux, Engie’s managing director of flexible generation and retail for Asia Pacific, Middle East and Africa

Kingdom tapping global hydrogen market under Saudi Green Initiative
Parties eventually want to broker deals with global partners
UAE wants to produce 1.4m tonnes of green hydrogen a year by 2031

French utilities firm Engie and Saudi Arabia’s Public Investment Fund have signed an initial agreement to develop green hydrogen projects in the kingdom, building on Gulf ambitions to become a world leader in the fast-growing renewable energy segment.

Under the memorandum of understanding signed this week, Engie and PIF will explore opportunities to jointly develop projects to produce green hydrogen and its derivatives for export, they said in a statement today.

The parties will evaluate the feasibility of green hydrogen production in Saudi Arabia, and draw up a strategy to tap the international market and secure offtake arrangements with partners.

“Our partnership with PIF will contribute to laying robust foundations for the green hydrogen industry, enabling the kingdom to be one of the top exporters of green hydrogen worldwide,” said Frédéric Claux of Engie.

Saudi Arabia, Opec’s top oil producer, wants to strengthen its global competitiveness and diversify its hydrocarbons-dependent economy under the Vision 2030 roadmap, and investing in renewables is one way of doing this.

Its GCC neighbours, particularly the UAE, are also looking at green hydrogen as a potentially lucrative market and one that would help them to meet decarbonisation goals.

Green hydrogen is hydrogen generated by renewable energy, or from low-carbon power. It has much lower carbon emissions than “grey” hydrogen, which is derived from fossil fuels.

The hydrogen rainbow

Green hydrogen is produced on a carbon-neutral basis through water electrolysis.
Turquoise hydrogen is created when natural gas is broken down into hydrogen and solid carbon with the help of methane pyrolysis.
Blue hydrogen is generated from the steam reduction of natural gas.
Grey hydrogen is obtained by steam reforming fossil fuels such as natural gas or coal.
Sometimes other colours are ascribed to hydrogen, based on how it is produced. For red, pink and violet hydrogen, the electrolysers are driven by nuclear power.
Yellow hydrogen is hydrogen produced from a mixture of renewable energies and fossil fuels.
White hydrogen is a waste product of other chemical processes, while the use of coal as a fuel produces brown hydrogen.

The UAE last week launched a National Hydrogen Strategy as part of its updated UAE Energy Strategy 2050.

The country wants to become a “leading and reliable producer and supplier of low-carbon hydrogen” by 2031, energy minister Suhail Al Mazrouei said.

Under the strategy, the UAE plans to produce 1.4 million metric tonnes of hydrogen annually by 2031 and increase this to 15 million each year by 2050.

Saudi Arabia also wants a piece of the action. It has pledged to generate at least 50 percent of its power from renewable sources by 2030 through the Saudi Green Initiative, diversifying away from oil exports.

Among other projects, it is building an $8.4 billion green hydrogen production plant at its Neom mega-development on the Red Sea coast. The kingdom reached a financing deal for the project in May, AGBI reported.

Claux signed the hydrogen agreement with Yazeed Alhumied, deputy governor and head of Mena investments at PIF.

“We are proud to contribute to driving the energy transition in the kingdom,” he said.