Dubai Electricity and Water Authority will release its strategy on hydrogen in 2022 as the UAE prioritises investment in the clean fuel as part of its energy transition efforts.
The utility is currently undertaking a Dh50 million hydrogen pilot project with Germany's Siemens Energy.
"We studied the pros and cons. However, the price is very positive right now. We're putting terms of reference in order to move the strategy for hydrogen and it will take maybe one year in order to complete this strategy, but I think hydrogen will compete in the future," said Saeed Al Tayer, managing director of Dewa.
The 300-kilowatt green hydrogen plant is being developed at the Mohammed bin Rashid Al Maktoum Solar Park, the site of the UAE's biggest solar plant.
The pilot project being developed by Dewa, Expo 2020 and Siemens Energy aims to demonstrate how hydrogen can be produced from solar power, as well as how to store and re-electrify the clean fuel.
Green hydrogen is produced through the process of electrolysis, which can be powered by energy from the sun, wind or other renewable sources.
Dewa is also studying the use of hydrogen in mobility, particularly in public transportation, Mr Al Tayer said.
The UAE plans to offer hydrogen-powered transportation locally as part of a broader roadmap exploring the potential of the fuel, which has become an important part of regional energy diversification strategies.
Dubai, the country's trading hub, plans to derive nearly three quarters of its energy needs from clean sources by 2050. The emirate is also increasing the use of sustainable transport as part of its 2030 green mobility initiative.
Meanwhile, Abu Dhabi's renewable energy company, Masdar, is advancing the development of a hydrogen demonstrator project as part of this alliance. The project's design is expected to be complete by the end of the year.
The company has already begun an assessment of its green hydrogen demonstrator project, which will find uses for fuel cells in buses at the carbon-neutral Masdar City as well as in aviation fuel to be used by Etihad Airways and Lufthansa.
Globally, the hydrogen industry is expected to grow to $183 billion by 2023, from $129bn in 2017, according to Fitch Solutions. French investment bank Natixis estimates that investments in hydrogen will exceed $300bn by 2030.