Analysis: Middle East to become major producer of green hydrogen

Analysis: Middle East to become major producer of green hydrogen

Many Middle East nations want to become major manufacturers of green hydrogen, which could ultimately usurp fossil fuels as a key source of energy for transportation, electricity and heating that combined create nearly three-quarters of global greenhouse gas emissions.

Huge challenges remain to realise green hydrogen’s potential, yet the region seems ideally positioned to become a significant protagonist. Gulf solar panels produce double the electricity as those in Germany, according to a 2022 Strategy& report that estimates the cost of producing solar, wind and green hydrogen in the Gulf is about one-third of the global average.

Noor Abu Dhabi is the world’s largest single-site solar plant with a 1.2-gigawatt (GW) power generation capacity, while the emirate’s 2 GW Al Dhafra solar plant will begin operations this year. Dhafra set a world record low price for solar of $0.0132/kWh when its financing was agreed in December 2020. Dubai’s Mohammed bin Rashid Al Maktoum Solar Park’s current capacity is 1.6 GW and will rise to 5 GW.

Gulf policymakers aim to deploy some of this capacity to make green hydrogen.

“To diversify economic activity, GCC countries must capitalize on their competitive advantage of low-cost renewable energy resources,” Strategy& wrote. “Two fundamental features of the region’s energy