Saudi Energy Meet virtual Summit

7-8 April, 2021

OAPEC
“Hydrogen

and Its Role in the Energy Transition”

Gas Industries Expert

Organization of Arab petroleum exporting countries
(OAPEC)
 Agenda

Hydrogen Key Facts

Role of Hydrogen in the Energy Transition

Hydrogen in the Arab Countries: Success Potentials

Hydrogen Plans in the Arab Countries

2 Hydrogen and Its Role in the Energy Transition, Saudi Energy Meet, 7-8 April 2021
 Hydrogen Value chain

Storage and
Production End-use applications
transportation

• Power Generation
• Fossil Fuel-based Storage
sector
hydrogen Compressed H2, Liquid H2
• Heat generation
• Renewable Hydrogen Transportation
• Transportation sector
Pipelines, trailers , tankers
• Industrial sector

3 Hydrogen and Its Role in the Energy Transition, Saudi Energy Meet, 7-8 April 2021
 Different colors of hydrogen

Over 17 production technologies can be used to produce Hydrogen, few of them are commercially viable.
Feedstock

COAL NATURAL GAS Grey or Black H2 BIOMASS WATER WATER

METHOD

Coal Steam Methane Carbon Capture

Reforming Pyrolysis Electrolysis Electrolysis
Gasification & Storage
SMR (Nuclear Power) (Renewable Energy)
Color

Lower CO2 emissions

acceptability

Emits 19 kg CO2 Emits 10 kg CO2 No CO2 emissions,

Environment

No No
per kg of H2 per kg of H2 by 90% compared but leaves solid CO2 emissions
with grey/black H2 CO2 emissions
carbon-rich residue

4 Hydrogen and Its Role in the Energy Transition, Saudi Energy Meet, 7-8 April 2021
 Key determents of hydrogen Production

Economics Emissions Scale

$/Kg H2 MW
10 Kg Co2/kg H2
1,500
1 GW X 100
20 19 unit/y
8
7.5

15 1,000
6

10 10 MW
4 10 X 100 unit/y
3.2 3 500
2.9
2 2.2 5
1.5
1.2
0.9 1
0
0 0 0
Coal (Black) Gas (Grey) Gas with CCUS Renewables Coal Gas Gas with CCUS RES SMR Electrolyzers
(Blue) (Green)

5 Hydrogen and Its Role in the Energy Transition, Saudi Energy Meet, 7-8 April 2021
 6
Global Hydrogen Production and consumption

Total Global Pure Hydrogen Production Total “Pure and mixed “Hydrogen consumption
is 77 MT is 115 MT

Hydrogen infrastructure is
still limited (4,500 km X a
Others
total of 3,000,000 km for NG) Transport 4% Methanol
0.01% 10%

76% 23% 1%
Ammonia DRI
27% 3%

Pure H2

Mixed H2,
Hydrogen pipelines
are geographically
concentrated! Refining
33%

Natural Gas coal Renewable Energy

-Today’s hydrogen production is part of the climate -Current hydrogen market is huge and growing
change problem (emits 830 Mt CO2/y) (limited as a feedstock for industry sector)

6 Hydrogen and Its Role in the Energy Transition, Saudi Energy Meet, 7-8 April 2021
 How hydrogen can foster the energy transition?

Integration with RES to

01 increase its uptake in
Energy Security
the energy mix
1 Secure and reliable

Decarbonization of hard-to- Energy Equity

02 abate end-use sectors
(such as transport sector) 2 Affordable & available

Diversifying the energy mix Environment

03
and improving the security
of supply for a sustainable
3 Sustainability
Green and clean
energy future

7 Hydrogen and Its Role in the Energy Transition, Saudi Energy Meet, 7-8 April 2021
 Promising sectors for hydrogen demand
Distribution of Pure Hydrogen Demand per Sector, 2050 FCEVs as Per National Targets for Selected Countries, by 2030
12,000,000
10,927,200
New Feedstock Power generation
(DRI) 12%
12% 10,000,000
Existing feedstock
uses
13% Transportion 8,000,000
28%

6,000,000 5,300,000

3,745,000
4,000,000

2,000,000
Building (Power 1,000,000 801,200
& heat) 81,000
14% Industry (Energy) 0
21% Total Demand USA EU China Japan *Korea Total
648 MTPA

Source: OAPEC based on Hydrogen council Study Source: OAPEC

Hydrogen and Its Role in the Energy Transition, Saudi Energy Meet, 7-8 April 2021
 Increasing momentum about the role of hydrogen in the energy transition

As of February 2021, ~30 countries in Europe, MENA, Americas and Asia have announced their national hydrogen strategies/ road maps

1) R & D

2)Vision

3) RoadMap

4) National Strategy

Source: OAPEC

9 Hydrogen and Its Role in the Energy Transition, Saudi Energy Meet, 7-8 April 2021
 Hydrogen in the Arab Countries: Success potentials

01 01
Availability of massive gas infrastructure in
Italy
place.
Spain
Turkey
02 Unique geographical location with proximity to
Syria Iraq
Iran potential demand centers like Asia and Europe.
Jordan
Algeria
Libya Egypt Long established strategic ties between Arab
03
03 UAE NOCS and IOCS.

04 Availability of natural gas and renewable energy

Stopped LNG plant resources.
LNG plant in full operation 04
LNG plant in partial operation
Gas Export Pipeline

10 Hydrogen and Its Role in the Energy Transition, Saudi Energy Meet, 7-8 April 2021
 Favorable conditions for blue/green hydrogen production in Arab Countries

Natural gas resources for blue hydrogen Cost of hydrogen production from natural gas in
production selected regions

2.5 EU Russia Arab

CAPEX
2
OPEX
Gas price
1.5

$/kg H2
1

0.5

0
Without with CCUS Without with CCUS Without with CCUS
CCUS CCUS CCUS

Source: IEA, Mackensey

$/MMBTU $/Kg

11 Hydrogen and Its Role in the Energy Transition, Saudi Energy Meet, 7-8 April 2021
Hydrogen in the Arab Countries: Success potentials

PV /Wind resources for green hydrogen

production

9-11
m/s
Wind speed

2200
KW/m2
Source: IEA, Mackensey
Solar radiation
Arab region is among the best favorable regions
for green hydrogen production with expected
higher capacity factor of electrolyzers
Hydrogen and Its Role in the Energy Transition, Saudi Energy Meet, 7-8 April 2021
 Planned projects in the Arab countries

Announced hydrogen projects in the Arab countries 3 FCEVs

12 Green H2 Green H2 Blue H2/NH3

With Siemens Jubail Green H2
11 100 MW
Masdar City
10 HRS
6 FCEVs
9 Blue Hydrogen
#no of Prpjects

8 H2
Green Hydrogen Green H2
7
H2 1.25 MW
6
5 Algeria H2 H2
Egypt H2
4
3 H2
KSA H2
2 UAE Green H2
1 H2 Sohar Port
0 H2
UAE KSA Oman Morocco Egypt Total
Green H2
2 GW in NEOM city
650 t/d
H2 H2 HRS
H2 Refueling station, HRS

Renewable energy, RES

7 2 2 Natural gas
Hybrid blue H2 (300
ton/y) & PV 20 MW
Green H2
Daqm 250-500 MW
Projects Projects Projects
13 Hydrogen and Its Role in the Energy Transition, Saudi Energy Meet, 7-8 April 2021
 Key challenges to develop hydrogen economy

Technology Requirements Feasibility and Funding

• Water requirements of the • High capital cost needs
electrolyzers (10 Liter of • High cost of hydrogen in

•
demineralized water per kg of
Hydrogen)
High capacity factor needed for
03 01 comparison with other fuels
like natural gas.

the electrolyzer
Policy and regulations
Culture and Capacity
Building
Trainings, workshops, research
04 02 • Government support is crucial
to develop hydrogen economy
in the Arab region
• Regulations (commercial,
institutes, R & D programs functional and safety )

14 Hydrogen and Its Role in the Energy Transition, Saudi Energy Meet, 7-8 April 2021
 Wraps-up

Today’s hydrogen production is part of the climate change problem

(emits 830 Mt Co2/y) but can be an enabler of the energy transition

Hydrogen can foster the energy transition through integration with RES,
decarbonization of hard-to-abate sectors and diversifying supply mix

Gas and hydrogen have the

potential to play a greater
Arab countries have the best favorable conditions for both green
and blue hydrogen production. role in attaining a
sustainable energy future

A dozen of H2 production projects is planned within the region which

emphasizes the governmental will to play a role in the H2 future

15 Hydrogen and Its Role in the Energy Transition, Saudi Energy Meet, 7-8 April 2021