Monday, 20 May, 2024
Saudi Arabia is one of the world's largest producers and exporters of oil, making the energy sector a crucial component of its economy. The Kingdom has an estimated 16 percent of the world's proven oil reserves, which are primarily located in the Eastern Province. The state-owned oil company, Saudi Aramco, is responsible for most of the country's oil production and is one of the world's largest oil companies. The company is also involved in the exploration and production of natural gas, as well as refining, marketing, and shipping of petroleum products.
As of 2021, the electricity generation capacity in Saudi Arabia was approximately 83 GW. The country heavily relies on oil and gas for power generation, but it has been actively diversifying its energy mix by investing in renewable energy sources like solar and wind. According to the U.S. Energy Information Administration in 2021, the country produced about 84.68 TWh of electricity, of which 52 percent came from thermal power plants, 19.5 percent from hydroelectric power plants and 28.5 percent from other renewable energy sources. Saudi Arabia has set a target of generating 50 percent of its electricity from renewable sources by 2030, with a focus on solar energy. Overall, Saudi Arabia is making significant investments in renewable energy and energy efficiency, with the aim of diversifying its energy mix and reducing its dependence on oil and gas. The country's renewable energy sector is expected to grow significantly in the coming years, with the potential to become a major player in the global renewable energy market.
The country has significant potential for solar and wind energy, which can help diversify its energy mix and reduce its carbon emissions. In 2019, the Saudi government launched the National Renewable Energy Program (NREP) with a target of installing 27.3 gigawatts (GW) of renewable energy capacity by 2024, and 58.7 GW by 2030.
Source: IRENA Statistics 2022
Saudi Arabia is a prime example of a country with an immense potential for clean hydrogen. Saudi Arabia is exploring ways to become the top supplier of hydrogen in the world and has clean hydrogen production targets of 2.9 million tons per year (t/yr) by 2030 and 4 million t/yr by 2035 (1) . The current focus is to gain a large market share in blue hydrogen,(2) particularly in the form of blue ammonia (i.e., ammonia produced from the combination of ammonia synthesis using hydrocarbon CCUS) in the coming decade.
Saudi Arabia took a major step in September 2020, when its state oil firm Saudi Aramco shipped 40 tons of blue ammonia from Saudi Arabia to Japan. This was the world’s first demonstration of blue ammonia supply chains, entailing the production and international maritime transportation of blue ammonia.Neom features as US$5 billion green hydrogen project that is a joint venture between Neom, Riyadh-based ACWA Power, and Pennsylvania-based Air Products. Expected onstream in 2025, the project’s 4 GW renewable capacity would make it the world’s largest renewable hydrogen-to-ammonia facility in the world, producing 1.2 million tons per year of (3) green hydrogen—roughly equivalent to 5 million barrels of oil per year in (4) energy terms.
On the consumption side, hydrogen use in the transportation sector is under active exploration. Saudi Arabia has tested Toyota Motor’s Mirai sedan-style fuel cell electric vehicles (FCEVs) at Air Product’s Technology Center in the Dhahran Techno Valley Science Park.
In September 2020, Hyundai Motor of (5) South Korea made its first-ever FCEV export to Saudi Arabia (or the Middle East), where Aramco would test Korea’s crossover utility vehicle–style FCEVs (NEXO) and FCEV buses (Elec City) for economic feasibility. There also is exploration of establishing FCEV-related manufacturing capacities in Saudi Arabia involving companies from North America and Europe, including New York-based Hyzon Motors to (6) build an assembly plant for FC trucks and France-based Gaussin to (7) build a manufacturing facility for on-road and off-road FCEVs.
An official strategy or roadmap is reportedly under development.
Currently, there is no dedicated legislation for hydrogen projects in Saudi Arabia.
Saudi Arabia has significant potential for renewable energy generation, especially solar power, and is also home to some of the world's largest oil reserves. The Saudi government has recognized the need to diversify its economy away from oil, and green hydrogen is seen as a promising option. In 2021, the Saudi government launched the Saudi Green Initiative, which includes plans to produce 50percent of the country's electricity from renewables by 2030, and to plant 10 billion trees in the country.
Saudi Arabia is working on developing a comprehensive hydrogen infrastructure to support the growth of its hydrogen industry. Here are some of the key initiatives and developments:
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Saudi Arabia is building the world’s largest green hydrogen-based ammonia production plant in the kingdom's planned futuristic city. The green hydrogen scheme (9) within Neom will use 4 GW of renewable power from solar, wind and storage to produce 600 tonnes per day of hydrogen. The project, set to come on stream in 2026, is expected to produce about 1.2 Mt of green ammonia per year. The other hydrogen projects that are currently being developed in Saudi Arabia:
These are just some of the hydrogen projects that are being developed in Saudi Arabia, and there are likely to be many more in the coming years as the country seeks to diversify its economy and reduce its dependence on oil.