Masdar signs agreement on major green hydrogen projects in Egypt

Masdar says Egypt’s abundance of solar and wind will “allow renewable energy production at a highly competitive price – a key opportunity for green hydrogen production.”

Ute Grabowsky | Photothek | Getty Images

Masdar of the United Arab Emirates and Hassan Allam Utilities of Egypt have signed agreements with state-sponsored Egyptian organizations that will see the parties work together on the development of large-scale green hydrogen projects.

In a statement on Sunday, Masdar – which is owned by Abu Dhabi’s state fund Mubadala – said the two agreements relate to facilities earmarked for the Mediterranean coast and the Suez Canal economic zone.

The projects in Egypt aim at an electrolysis capacity of 4 gigawatts by the year 2030 with the production of as much as 480,000 tons of green hydrogen annually.

Described by the International Energy Agency as a “versatile energy carrier”, hydrogen has a wide range of applications and can be used in sectors such as industry and transport.

It can be manufactured in several ways. One method involves the use of electrolysis, in which an electric current splits water into oxygen and hydrogen.

If the electricity used in this process comes from a renewable source such as wind or sun, then some call it green or renewable hydrogen.

While in some circles there is enthusiasm for the potential of hydrogen, the vast majority of its production is currently based on fossil fuels.

Read more about clean energy from CNBC Pro

“Masdar and Hassan Allam Utilities see Egypt as a hub for green hydrogen production, targeting the bunkering market, exporting to Europe and promoting local industry,” Masdar said in a statement.

“Egypt has abundant solar and wind resources that allow the production of renewable energy at an extremely competitive price – a key opportunity for green hydrogen production,” it added. “Egypt is also located near markets where the demand for green hydrogen is expected to grow the most, providing robust export opportunities.”

Masdar’s mention of Europe is instructive and illustrates how the hydrogen sector may develop in the coming years as large economies attempt to decarbonise.

In July 2021, the CEO of the Italian company Snam outlined a vision for the future of hydrogen, saying that the “beauty” was that it could be easily stored and transported.

In a speech to CNBC’s “Squawk Box Europe”, Marco Alverà spoke about how current systems would be used to facilitate the supply of hydrogen produced using renewable sources as well as biofuels.

“Right now, if you turn on your heater in Italy, the gas is flowing from Russia, all the way from Siberia, into 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 EU’s executive arm, the European Commission, has planned to install 40 GW of renewable hydrogen electrolysis capacity in the EU by 2030.

In addition to this target, the Commission’s plan also envisages an additional 40 GW “in Europe’s neighborhood”, which will “export to the EU.”

The last few years have seen a large number of companies weighted the topic of hydrogen.

In a recent interview with CNBC, Michele DellaVigna, Goldman Sachs’ head of commodity stocks in the EMEA region, tried to highlight the important role he felt it would have in the future.

“If we want to go to net-zero, we can not do it only through renewable energy,” he said.

“We need something that takes today’s role as natural gas, especially to control seasonal fluctuations and intermittence, and that’s hydrogen,” DellaVigna argued, continuing to describe hydrogen as “a very powerful molecule.”

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 using 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 may play in the decarbonisation of society.

“Whether we do it with electrolysis or we do it with carbon capture, we need to generate hydrogen in a clean way,” DellaVigna said. “And once we have that, I think we have a solution that could one day become at least 15% of global energy markets, which means it will be … over a trillion dollar market a year.”

Leave a Reply

Your email address will not be published. Required fields are marked *