Riyadh - Sharikat Mubasher: Saudi Arabia is poised to lead the renewable hydrogen production for both local consumption and export as the world moves towards decarbonization.
The Kingdom’s role in forming the future energy landscape, notably concerning green hydrogen, becomes increasingly pivotal, according to a recent report released by King Abdullah Petroleum Studies and Research Center (KAPSARC).
The report, which compared the production of green hydrogen in Saudi Arabia and Germany, revealed that the Kingdom’s solar-based production would require 25% less investment than Germany’s wind-based approach to achieve a daily production of 600 tons of green hydrogen by 2030.
Additionally, financing costs in the Kingdom are at least 200 basis points less than those in Germany, including shipping charges. This advantage solidifies the Kingdom’s position as a top competitor in global solar energy potential.
Yousef Al-Shammari, a senior energy research fellow at Imperial College London, stated that producing a kg of green hydrogen in Saudi Arabia will cost between $1 and $2, while in Germany it will cost $5 to produce one kg.
“When it comes to the Western markets, they are looking at green hydrogen, not blue. They want to produce as much as 10 million tons per year by 2030 as part of the decarbonization plans,” Al-Shammari elaborated.
Assuming the shipping and reconversion cost of $1 per kg of hydrogen equivalent in the form of ammonia is achieved by 2030, green hydrogen from Saudi Arabia could still be delivered to Europe, namely Germany, with relative competitiveness.
Moreover, Saudi Arabia’s geographical location provides it with a strategic advantage in the export of green hydrogen as it minimizes transportation distances and costs to major demand centers, particularly when compared to other potential exporting countries.
