Egypt and UAE to Jointly Build Green Hydrogen Production Facilities Along Suez Canal and Mediterranean Coast

published: 2022-05-05 9:30 | editor: | category: News

Egypt’s Hassan Allam Utilities (HA Utilities) and UAE-based renewable energy developer Masdar have signed two MoUs to collaborate on the development of green hydrogen production in the Suez Canal Economic Zone (SC Zone or SETC) and on the Mediterranean coast. The signing ceremony was held on April 24. It was attended by the following officials: Egyptian Prime Minister Mostafa Kamal Madbouly, UAE Minister of Industry and Advanced Technology and Chair of Masdar Sultan Ahmed Al Jaber, Egyptian Minister of Electricity and Renewable Energy Mohamed Shaker El Markabi, and Egyptian Minister of Planning and Economic Development and Chair of Egypt’s Sovereign Wealth Fund Hala El Said. The event was first reported by other regional and international news agencies such as Reuters.

According to the reporting by various news agencies, Masdar and HA Utilities (under Hassan Allam Holding or HAH) will jointly build production facilities and related infrastructure in the SC Zone and the Mediterranean coast between now and 2030. Once up and running, these facilities will have a total electrolysis capacity of 4GW per year, a total green hydrogen production capacity of 480,000 tons per year, and a total green ammonia production capacity of 2.3 million tons per year. The green ammonia will be either exported to other countries or used to meet the demand from local industries.

The entire project will be developed in multiple phases. For the first phase, an annual production capacity of 100,000 tonnes for e-methanol will be set up in the SC Zone by 2026. The e-methanol will be bunkered by freighters for transport. In addition to HA Utilities and Masdar, the other participants of the project include Egypt’s New and Renewable Energy Authority, Egyptian Electricity Transmission Company, Egypt’s Sovereign Wealth Fund, and the administrative authority of the SC Zone.

Masdar and HA Utilities regard Egypt as a major hub for green hydrogen production. The hydrogen, ammonia, and methanol from the planned production facilities will target the demand for clean fuels that can be used for power generation, transportation, and heating. Furthermore, the development of the exportation of green hydrogen to European countries is expected to drive the growth of industries in Egypt. Since Egypt has the land and climate to develop mega solar and wind projects that provide electricity at very competitive costs, it also has the corresponding advantage in green hydrogen production. Hence, the collaboration between Masdar and HA Utilities will be mutually beneficial for both countries and strengthen their strategic partnership in the area of energy. Additionally, the project is a showpiece for Egypt and UAE that will respectively host COP27 and COP28. 

Prime Minister Madbouly stated that his government is promoting investments that expedite the country’s energy transition. He added that the joint project of Masdar and HA Utilities could turn the country into one of the world’s green hydrogen production centers and a key contributor in the global phase out of fossil fuels. Minister El Said stated that her country has a wealth of solar and wind resources that can be leveraged to create cost advantages for various renewable energy projects. Said also stated that the SC Zone and the Mediterranean coast are highly suitable for the international trading of green hydrogen and its derivative products. Setting up green hydrogen production facilities in these areas will not only accelerate the growth of the global market for green hydrogen but also achieve the sustainable development goals outlined in Egypt Vision 2030.

Egypt is targeting above 40% for the share of renewables in its energy mix by 2030. In order to reach this target, the Egyptian government set three main policy directives last year: (1) adoption of natural gas for power generation in the interim period; (2) establishment of a national green hydrogen strategy; and (3) expansion of the deployment of renewable generation assets, especially PV systems and wind turbines. The Ministry of Electricity and Renewable Energy is revising the national renewable strategy for 2030 and developing a national green hydrogen strategy at the same time. The latter is expected to be unveiled this October.

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