The Gulf is on the brink of another energy revolution

Traffic in New Delhi. In January, India's government approved $2.3 billion in funding to grow various segments of the country's green hydrogen sector. India hopes this investment will abate 50 million metric tonnes of greenhouse gas emissions. APShow less

In a highly connected and globalised world, it is crucial for every nation to consider its geolocation, and how this presents opportunities and strengths that will help it thrive in the modern world. The GCC has fared extremely well in this regard, with all its member nations doing their best to develop cities that bridge gaps between the East and West, attracting foreign direct investment, business and leisure tourism, all while competing and collaborating with long-established global players.

The region as it stands today is the result of capable leadership and continuous efforts by the public and private sectors to diversify each member country’s economic interests and reduce its reliance on oil. However, there are always new avenues to explore. As a leading exporter of energy in the global context of climate change and the race to net zero emissions, we cannot overlook the Gulf’s geographical advantages.

GCC nations have some of the highest solar exposures in the world. According to a report published by Strategy&, a part of consulting firm PricewaterhouseCoopers’ network, solar power plants in the Gulf can expect 1,750 to 1,930 hours of full-load operation each year, compared with solar plants in Germany that can register 940 hours per year on average. Solar panels in the GCC have the capacity to produce twice as much power as Germany and any comparable European country – this is an asset and opportunity we must not take lightly.

A Saudi man stands at a solar plant in Uyayna, north of Riyadh. Green hydrogen is extracted from water using renewable energy such as wind, hydropower and solar energy, which is in abundance in the Gulf. AFP

Connected to this opportunity is another – green hydrogen, which has been described as the fuel of the future by the UN Industrial Development Organisation given that its production – that involves electrolysing renewable energy sources such as air, water or sunlight – results in zero carbon emissions. There are various forms of hydrogen in production across the globe today but as of 2021, less than one per cent of this output is actually green, according to the International Renewable Energy Agency.

The most promising characteristic of hydrogen is its versatility – it can be used in liquid or gas states, and can be converted for use as fuel or electricity. It can be used in the production and running of electric vehicles and machinery, and can be transported as renewable energy when it is converted into ammonia. Like any energy source, of course, there are challenges – most notably shipping and handling because hydrogen is highly flammable, much more so than natural gas, propane and gasoline; this raises the costs of production. However, given its potential, its applications and the trend towards decarbonisation, investment in green hydrogen is sure to pay off in the coming decades.

Gulf nations have begun a series of efforts to embrace this fuel. For example, a Dubai Hydrogen Alliance has been established in the UAE, and Saudi Arabia has set a target to produce four million tonnes of hydrogen by 2040.

The current leading hydrogen provider in the region is Oman, which could become the world’s sixth-biggest exporter of the fuel by 2030, according to the International Energy Agency. Oman aims to produce a minimum of one million tonnes of green hydrogen per annum by 2030, 3.75 million by 2040 and up to 8.5 million each year by 2050.

Earlier this year, Hydrogen Oman SPC signed $20 billion worth of green hydrogen projects. Furthermore, Energy Development Oman announced that it is partnering with Siemens Energy towards working on R&D initiatives to support green hydrogen technology, innovation and the sharing of expertise.

A culture of collaboration, building and growing with regional and international allies has always been a part of Oman’s approach. Omani advancements in green hydrogen are good news for the broader Gulf region. However, we are still in the relatively early stages and there is plenty of potential for local and regional partners to get on board and play a notable role in the expansion of green hydrogen production.

Demand for green hydrogen is projected to rise to approximately 660 million tonnes a year by 2050, with costs of production declining as processes are refined and economies of scale are achieved. There is still much to be done in this area – producers must educate target consumers across the globe about this alternative and work closely with them for a seamless transition from fossil fuels to renewable sources in coming years.

Green hydrogen is bringing a series of opportunities to the region that could contribute to sustainable forms of energy as well as sustainable economic activity – both of which are crucial for achieving the better and prosperous future that every nation in the Gulf region strives for. With careful planning, collaboration and the optimum use of resources, I do not doubt that the Gulf will make further progress in renewables and continue to hold its place as a global centre for energy production.