A source says that Egypt’s abundance of solar and wind energy “will allow for the generation of renewable energy at a very competitive cost – a key enabler for green hydrogen production”.
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The UAE’s Masdar Company and the Egyptian Hassan Allam General Services Company have signed agreements with Egyptian state-backed organizations that will see the two parties cooperate on developing large-scale green hydrogen projects.
“Masdar”, owned by the government fund “Mubadala” in Abu Dhabi, said in an announcement on Sunday that the two agreements relate to the facilities designated for the Mediterranean coast and the economic zone of the Suez Canal.
The projects in Egypt aim to produce a 4 gigawatt electrolyzer by 2030, with a production of up to 480,000 tons of green hydrogen annually.
Described by the International Energy Agency as a “versatile energy carrier”, hydrogen has a variety of applications and can be deployed in sectors such as industry and transportation.
It can be produced in several ways. One method involves the use of electrolysis, with an electric current that splits water into oxygen and hydrogen.
If the electricity used in this process comes from a renewable source such as wind or solar energy, some call it green or renewable hydrogen.
While there is excitement in some quarters about the potential of hydrogen, the vast majority of its generation is currently dependent on fossil fuels.
“Masdar and Hassan Allam Utilities see Egypt as a center for green hydrogen production, targeting the refueling market, exporting to Europe and boosting the local industry,” Masdar said in a statement.
“Egypt has an abundance of solar and wind energy resources that enable renewable energy generation at a very competitive cost – a major enabler for green hydrogen production,” she added. “Egypt is also close to markets where green hydrogen is expected to increase in demand, providing a strong export opportunity.”
The mention of a “Masdar” of Europe is helpful and shows how the hydrogen sector could develop in the coming years as major economies attempt to decarbonize.
In July 2021, the CEO of Italy’s Sanam outlined a vision for the future of hydrogen, saying its “beauty” is that it can be easily stored and transported.
On CNBC’s “Squawk Box Europe,” Marco Alvira spoke about how current systems can be used to facilitate the delivery of hydrogen produced using renewable sources as well as biofuels.
“Right now, if you turn on your heater in Italy, the gas flows from Russia, all the way from Siberia, into pipelines,” he said.
“Tomorrow we will produce hydrogen in North Africa and the North Sea with solar and wind energy resources,” Alvira said. This hydrogen can travel through the existing pipeline.
For its part, the EU’s executive arm, the European Commission, has laid out plans to install 40 gigawatts of renewable hydrogen electrolyzer capacity in the EU by 2030.
Besides this target, the Commission’s plan also envisages an additional 40 GW “in the neighborhood of Europe” that would “export to the European Union”.
The past few years have seen a handful of companies voice their opinion on the topic of hydrogen.
In a recent interview with CNBC, Michele DellaVigna, head of Goldman Sachs’ commodity equities business unit for EMEA, sought to highlight the important role he felt he would play in the future.
“If we want to go to net zero, we can’t just do that with renewable energy,” he said.
“We need something that takes on the role of natural gas today, especially to manage seasonality and intermittency, and that is hydrogen,” Delavigna argued, describing hydrogen as a “very powerful molecule.”
The key, he said, is “to produce it without CO2 emissions. That’s why we’re talking about green, and we’re talking about blue hydrogen.”
Blue hydrogen refers to hydrogen produced using natural gas – a fossil fuel – with carbon dioxide emissions generated during the process being captured and stored. There has been a charged debate about the role blue hydrogen can play in removing carbon from society.
“Whether we do it using electrolysis or using carbon capture, we need to generate hydrogen in a clean way,” Della Vigna said. “And once we have it, I think we have a solution that could, one day, become at least 15% of the global energy market which means it will be … a market worth over a trillion dollars a year.”