The new agreement between Mubadala and Siemens Energy speaks to the important role that hydrogen is expected to play in the region’s future energy mix, according to Carla Sertin, group editor, Energy & Construction.
“This agreement is in line with a wider trend towards hydrogen as a facilitator of the energy transition in the region,” said Sertin.
On Monday, Mubadala and Siemens Energy signed a deal to create a strategic partnership to drive investment and development of advanced technology, manufacture of equipment, and green hydrogen and synthetic fuel production.
Part of the deal includes the use of renewable energy to produce green hydrogen and synthetic fuels. The production of green hydrogen, however, comes with some challenges.
“Hydrogen has been increasingly seen as the key to decarbonising the economy, but does come with its own costs and disadvantages,” said Sertin.
“Green hydrogen in specific is, by definition, created using renewable power sources, meaning that it requires a relatively robust renewables sector to power electrolysis plants, which split water into hydrogen and oxygen. It can also be difficult to store, and is an explosive element,” she added.
Energy producers in the region, including Masdar and other energy players in the Mubadala Group, seem determined to overcome these disadvantages.
“Agreements with experts in the energy sector only help advance the large scale viability and potential for success with hydrogen, so recent headlines including the agreement between Mubadala and Siemens Energy are cause for optimism,” said Sertin.
“It is difficult to speculate on the future of hydrogen because it is relatively new, but energy producers in the region appear to be betting on it as an important part of the future energy mix,” she added.
The initial focus of activity the memorandum of understanding (MoU) outlined will be in Abu Dhabi and it is intended this will be expanded to international markets over time.
Hydrogen has been increasingly seen as the key to decarbonising the economy
Together with Masdar and other energy players in the Mubadala Group, the companies will work closely towards the following goals:
- Use renewable energy to produce green hydrogen and synthetic fuels
- Provide clean and transportable energy to fuel new hydrogen-based ecosystems that are supplied from the UAE
- Establish an Abu Dhabi-headquartered world-class player in the synthetic fuels sector
- Jointly advance technology and drive down the costs of green hydrogen and synthetic fuels production
- Enable Mubadala and Siemens Energy to access emerging hydrogen markets and create value for both parties
Separately, the UAE aims to become one of the world’s lowest-cost producers of hydrogen, helping in the Middle Eastern state’s effort to slash polluting carbon emissions by nearly a quarter.
The country will use carbon-capture technologies to create what’s known as blue hydrogen, supplying cleaner energy, Sultan Al Jaber, chief executive officer of Abu Dhabi National Oil Co and UAE Industry Minister, said at a virtual conference on Tuesday.
Abu Dhabi holds most of the oil and gas in the OPEC member state and is the country’s capital.
Sultan Al Jaber, CEO of Abu Dhabi National Oil Co and UAE Industry Minister
Adnoc is expanding its capacity for technologies that can prevent carbon emissions from being released into the atmosphere and that use the resulting gas for further oil production by injecting it into wells. The company already has one project to capture, store and use carbon.
Using that technology, “we believe we can be one of the lowest-cost and largest producers of blue hydrogen in the world,” Al Jaber said. The UAE sees “no credible way” of meeting global climate goals without carbon capture and storage.
The UAE aims to cut its emissions by 24% by 2030 compared with 2016, Al Jaber said at the Abu Dhabi Sustainability Week online conference. The nation is the first in the region to commit to an economy-wide reduction in emissions, he said.
* With Bloomberg
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