Gulf states’ quest to find ‘new oil’ turns to hydrogen
Unrivaled expertise in the energy industry and a growing global market for hydrogen is pushing Gulf oil exporters to invest in the global realignment toward cleaner energies.
Electricity is poised to become the lifeblood of the global economy in the energy transition era, underlining the crucial importance of electricity storage. “Electricity could not be transported over long distances, whereas now, and this is a completely new point, hydrogen, produced from electricity, can be stored and exported,” said Gerard Mestrallet, honorary chairman of French energy group ENGIE and waste and water management firm SUEZ.
Green hydrogen, a climate-friendly energy carrier obtained by splitting water molecules using electrolysis powered by renewables, is emerging as a clean fuel of the future to power transportation and energy-intensive industries such as steel manufacturing.
For the Arab Gulf states, which have some of the highest solar exposures in the world, the prospect of exporting large volumes of renewable electricity in the form of hydrogen is a timely opportunity as they attempt to diversify away from oil and gas revenues. In the United Arab Emirates (UAE), three state-run entities formed the Abu Dhabi Hydrogen Alliance to position the fossil fuel-rich emirate as a major exporter of blue and green hydrogen.
“The expansion of the hydrogen market is part of a very large, deep, gigantic movement to transform the world's energy systems toward green energy sources,” Mestrallet told Al-Monitor. Although estimates vary widely, a European Union report said analysts predict clean hydrogen could meet 24% of world energy demand by 2050.
