“As the world turns to clean energy as a viable way to reach net zero [target], Egypt is emerging as a global and regional powerhouse for green hydrogen production, storage and export,” Hala Al-Said, minister of Planning and Economic Development and chairperson of the Sovereign Fund of Egypt (TSFE), said on Monday.
Al-Said’s remarks came in the wake of seven Memoranda of Understanding (MoUs) Egypt signed on 25 August to establish industrial complexes to produce green hydrogen in the Ain Al-Sokhna Industrial Zone, which is located within the Suez Canal Economic Zone (SCZONE).
The seven companies include British company Globeleq which will set up a new complex to produce two million tons of green hydrogen annually. The Saudi Arabia-based Alfanar Global Development signed the second MoU to produce 500,000 tons of green ammonia from 100,000 tons of green hydrogen per year. The UAE’s Karaz signed the third MoU to build an industrial complex with a total production capacity of up to 175,000 tons.
The fourth MoU with the UAE’s KK Power International is to build a factory that will produce 230,000 tons of green hydrogen. Mediterranean Energy Partners (MEP) will establish a Green Ammonia facility with a production capacity of 120,000 tons per year for the fifth. The sixth MoU was signed by India’s renewable energy firm ACME Group to build an industrial complex with a total production capacity of 2.2 million tons of green hydrogen annually. The seventh MoU was signed by London-based firm Actis to produce green hydrogen and green ammonia with a total production capacity of 200,000 tons annually.
The agreements are part of the government’s plans to add green hydrogen to the local integrated energy system in partnership with the private sector and global expertise to keep pace with the global development on climate change and the current trend towards a green economy.
In 2030, the total investment in hydrogen infrastructure in Egypt may reach $500 billion. This level of investment is likely to create seven million direct and indirect jobs by 2050, playing a critical role in decarbonising sectors and as well as having a massive impact on jobs and the economy, Al-Said said.
Green hydrogen – promising a sustainable energy carrier in terms of environmental and climate protection – produces zero emissions and many see it as the answer to limiting global warming.
The subdivision of hydrogen into different colours is meant to indicate how it was produced, the energy sources used and the climate neutrality of the hydrogen, explained Chairman of the Energy Committee of Egyptian Businessmen’s Association Mohamed Helmi.
Blue hydrogen is produced mainly from natural gas and its output is hydrogen but also has carbon dioxide as a by-product. Grey hydrogen is obtained by steam reforming fossil fuels such as natural gas or coal whose waste product – CO2 – is released directly into the atmosphere. The use of coal as a fuel produces brown hydrogen.
Green hydrogen is produced without harmful greenhouse gas emissions. It uses clean electricity from surplus renewable energy sources, such as solar or wind power, to electrolyse water.
The problem of sole dependence on renewable energy sources such as solar or wind power is that they are variable energies, dependent on weather factors, Helmi told Al-Ahram Weekly. From this emanates the importance of green hydrogen as a sustainable energy carrier, meaning that energy is stored in the hydrogen to be used when needed, Helmi explained.
The MoUs are very important due to the fact that green energy is the future energy, noted Helmi, who is also president of the Federation of Renewable Energy and Sustainable Development Associations and Organisations.
Despite the fact that green hydrogen makes up a relatively small percentage of the energy used worldwide because its production is expensive, Helmi says, it will become more common as its cost drops.
The location of the projects within the SCZONE is vital because it is close to the Gulf of Suez where the wind and solar power are abundant.
SCZONE Chairman Walid Gamaleddin said the SCZONE has a vision to be a regional and international hub to produce green fuel and to maximise return from these projects.
The SCZONE is preparing a plan to introduce and promote the zone on a global scale during the UN Climate Change Conference (COP27), while preparing specific investment projects within the economic zone to promote it, Gamaleddin said.
For the British Globeleq company, a leading independent power producer operating and developing diversified power projects in Africa, and which signed one of the seven MoUs, Egypt’s unique geographical location, at the crossroads of Africa, Europe, and Asia, with about 13 per cent of the global trade flowing through the Suez Canal, puts the country in a position to become a global green energy hub.
Egypt’s advanced infrastructures of natural gas and electricity, and its strategic geographical location will activate its role for being a hub for green energy, Helmi said.
Prime Minister Mustafa Madbouli said that President Abdel-Fattah Al-Sisi has issued directives to maximise the use of renewable energy through green hydrogen projects, in light of the growing global interest in these projects as a promising source of energy in the near future.
Madbouli emphasised that President Al-Sisi ordered maximising the use of local components in the green hydrogen production system.
The signing of the MoUs comes two months ahead of Egypt’s hosting of COP27, on behalf of Africa, which will be held in the Red Sea city of Sharm El-Sheikh from 7-17 November.
In June, in a virtual speech during the Aswan Forum for Sustainable Peace and Development, UN Secretary-General António Guterres said despite Africa’s enormous renewable energy potential, just two per cent of renewable energy investments have gone to Africa over the last decade, adding that countries must arrive in Egypt for COP27 determined to have clear plans to close this financing gap.
Mohamed Saadeddin, chairman of the Energy Committee of the Federation of Industries, said that Egypt began to adopt a green economy and energy seven years ago.
Egypt has been adopting clean energy of wind, solar, and water since 2015, Saadeddin pointed out. Entering the field of green hydrogen ahead of the COP27 became a necessity to keep pace with the advanced industries of clean energy in line with Egypt’s vision 2030, he told the Weekly.
Egypt aims in the coming years to reduce carbon emissions, promote the use of renewable energy sources, and use alternative energy forms including green hydrogen as part of its National Climate Strategy 2050 announced by the government in May.
As for Egypt’s vision 2030, the country aims to generate 20 per cent of electricity in 2022 from renewable energy sources, with the goal of increasing this figure to 42 per cent by 2035.
*A version of this article appears in print in the 1 September, 2022 edition of Al-Ahram Weekly.
Short link: