Air Merchandise & Chemical compounds, the U.S. industrial fuel big, introduced plans on Tuesday to construct a inexperienced hydrogen plant in Saudi Arabia powered by four gigawatts of wind and solar energy, the world’s largest such mission introduced up to now.

The $5 billion plant shall be collectively owned by Air Merchandise, Saudi Arabia’s ACWA Energy and Neom, a brand new mega-city deliberate close to Saudi Arabia’s borders with Egypt and Jordan.

The finished facility will produce 650 tons of inexperienced hydrogen day by day, sufficient to run round 20,000 hydrogen-fueled buses, Air Merchandise mentioned. The gasoline shall be shipped as ammonia to finish markets globally then transformed again to hydrogen. Ammonia manufacturing is predicted to begin in 2025.

(To learn Greentech Media’s explainer on inexperienced hydrogen, click on right here.)

Pennsylvania-based Air Merchandise claims to be the world’s largest producer of hydrogen and a pacesetter within the liquefied pure fuel subject expertise. The corporate trades on the New York Inventory Trade with a market worth of almost $60 billion.

The mission can be an enormous step ahead for Saudi Arabia’s ambition for Neom to grow to be an essential world middle for renewable vitality and inexperienced hydrogen. The nation is establishing Neom as a particular financial zone, with an ambition to host 1 million folks from all over the world. “It is a pivotal second for the event of Neom and a key factor in Saudi Imaginative and prescient 2030 contributing to the Kingdom’s clear vitality and round carbon economic system technique,” Neom CEO Nadhmi Al Nasr mentioned in an announcement.

Talking to analysts on a convention name on Tuesday, Air Merchandise CEO Seifi Ghasemi mentioned the corporate is assured the mission shall be viable with out subsidies given the accelerating world race for low-carbon transport fuels. Any authorities assist can be “icing on the cake.”

“There are 260 million business autos on this planet. If 1 p.c converts to hydrogen, you find yourself with enormous numbers that will require 50 crops like this,” Ghasemi mentioned. “We’ve been engaged on this for 4 years, and our technique was to be the primary to construct a mega-scale plant.”

Along with the $5 billion plant, the mission would require $2 billion of recent distribution infrastructure, to be owned by Air Merchandise.

A value premium for inexperienced hydrogen?

Requested whether or not the mission economics would stand as much as present hydrogen costs, Ghasemi mentioned sure, earlier than correcting himself and saying that inexperienced hydrogen will garner a premium.

Inexperienced hydrogen is at the moment uncompetitive with its grey cousin, which is produced utilizing pure fuel. Competitively priced inexperienced hydrogen would require low energy costs and excessive electrolyzer utilization charges. Air Merchandise believes it might safe each with a big pool of offtakers and entry to Saudi Arabia’s huge renewable vitality sources.

ACWA Energy has delivered a sequence of main photo voltaic tasks in recent times and has beforehand achieved record-low photo voltaic costs within the area.

German’s thyssenkrupp will provide the electrolyzers. Final month the corporate revealed its electrolyzer manufacturing capability had reached 1 gigawatt, with the choice to ramp up additional. Norwegian agency Nel and the U.Okay.’s ITM Energy are additionally creating electrolyzer gigafactories.

Quite a lot of main oil and industrial gamers are quickly accelerating their investments into inexperienced hydrogen. BP is finding out the feasibility of an ammonia plant in Australia, powered by 1.5 gigawatts of wind and photo voltaic, beforehand regarded as the biggest such plan.

“Hydrogen shouldn’t be area of interest anymore,” Christoph Noeres, head of vitality storage and hydrogen at thyssenkrupp, instructed GTM in an e mail. “It would allow the sector coupling [required] to succeed in the Paris Settlement’s local weather objectives. Hydrogen has been recognized to be the important thing factor for sustainable fuels and chemical substances and may cut back or keep away from CO2 in sectors the place electrification shouldn’t be potential.”

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