GCC well-positioned to capitalise on green hydrogen boom

08 June 2021 Consultancy-me.com 4 min. read
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An abundance of sun and wind puts the GCC in the driver’s seat of the global green hydrogen landscape – according to a new Roland Berger study with the MENA Hydrogen Alliance.

How can water convert into fuel? A process called electrolysis can split water into its component parts: oxygen and hydrogen – the latter of which can be used as fuel in liquid form. Electrolysis technology is advancing rapidly, and hydrogen is rapidly edging its way into the energy landscape as a result.

“In spite of great doubts only until a few years ago, today hydrogen is believed to have the potential to become the ‘new oil’ or the ‘new natural gas’,” noted Vatche Kourkejian, partner at Roland Berger Middle East. Hydrogen is combustible, renewable, and has applications across industry, transportation and fuel cell development. 

Global hydrogen demand forecast

The versatility and potential – combined with an urgent focus on sustainable energy forms – is set to cause a demand boom: from roughly 85 megatonnes in 2020 to around 580 megatonnes by 2050. And much of this will likely be focused on ‘green hydrogen’ – where even the electrolysis is powered by renewable energy, making the whole process more sustainable.

The race is on to meet this demand, and the researchers note that GCC could well put itself in the lead. Front and centre is the region’s abundance of renewable energy sources – particularly wind and solar. “GCC countries have the advantage of having plenty of space, sunshine and, in some areas, wind energy amidst being prosperous, expanding economies open for innovations,” explained Kourkejian.

“Thus, it is not surprising that the GCC region has quickly become one of the highest-ranked regions in terms of lowest-cost and largest-scale renewable energy projects,” he added. Helping things along is a concerted effort from regional governments towards a broad-based energy transition.

GCC current and future hydrogen demand by application

With sustainability playing a key role in GCC diversification efforts, domestic demand in itself is enough to spur a vibrant green hydrogen industry. By 2050, the region could be consuming anywhere between 25 and 50 megatonnes of hydrogen – led by high demand in Saudi Arabia and Oman, with healthy markets in Qatar, Bahrain and the UAE. 

Current and future demand spans all economic segments – from the production of methanol and ammonia for industrial use to the more direct applications in transport and energy. Per the researchers, GCC economies have the potential to meet this entire demand through green hydrogen in the coming decades – and become a chief global exporter.

Economic gains

The economic benefits are far reaching. Another report report from last year forecasted the global green hydrogen market would touch $300 billion in market value by 2050. Set to take a big piece of this pie, the GCC could gain GDP boosts and substantial employment benefits. 

Green hydrogen job creation potential

According to Roland Berger and MENA Hydrogen Alliance. a thriving green hydrogen ecosystem could create between 400,000 and 800,000 jobs by 2050 – spanning the entire value chain from renewable generation for energy supply – a big employment opportunity – to electrolysis, and subsequently storage and distribution of green hydrogen. 

Recent research also explored the value of green ammonia in the green hydrogen supply chain – as a low-cost and low-emission export method. Exploring that potential will likely have its own economic advantages for GDP and employment. 

So the time seems right for a push. Targeted stakeholder collaboration, strategic infrastructure investments, global technology partnerships, and strong workforce training are key to maximizing the GCC’s green hydrogen potential – per the experts.