Saudi Arabia’s planned megacity, NEOM, includes a US$5 billion-dollar investment in green hydrogen
For Saudi Arabia to now invest in green hydrogen, considered by some to be the most viable alternative to oil, is a clear indication of how views of renewable energy are shifting.
As the global community confronts the worsening threat of climate change, countries are spending trillions to develop renewable energies. There is perhaps no greater indication that renewables are the future of the energy industry than the fact that Saudi Arabia, the world’s leading crude oil exporter, is investing US$5 billion in green hydrogen.
Saudi Arabia has become synonymous with crude oil production ever since the fossil fuel was discovered in the desert country in the 1930s. Exporting oil transformed the country, officially known as the Kingdom of Saudi Arabia, into a wealthy and powerful nation on the world stage. Its role in the Organization of the Petroleum Exporting Countries (OPEC) gives it influence over the entire globe.
For Saudi Arabia to now invest in green hydrogen, considered by some to be the most viable alternative to oil, is a clear indication of how views of renewable energy are shifting. Even as the effectiveness of alternative energies like solar and wind energy are debated in the United States, business and political leaders are embracing the trend as necessary and inevitable.
Saudi Arabia’s investment in green hydrogen
In October 2017, Saudi Crown Prince Mohammad bin Salman (known commonly as MBS) announced his plans for an autonomous megacity to be built on the nation’s northeastern coast along the Red Sea. The city, Neom (or NEOM, the name roughly translates to “new future”), is slated to be completed in phases, with the first phase being completed in 2025.
The city will reportedly be powered entirely by wind and solar energy. Among the facilities that will be powered by that energy is a US$5 billion plant that will create green hydrogen. When Neom’s green hydrogen plant opens in 2025, it will be one of the largest facilities of its kind in the world.
The news of this investment comes on the heels of the European Union’s 2020 agreement to invest €500 billion (US$572 billion) in renewable energies. Roughly US$145 billion of that investment was earmarked for the development of green hydrogen and improved public transportation. These billions of dollars in green hydrogen investments indicate just how much faith global leaders have in this emerging energy source.
Neom is intended to be more than just a clean energy hub, though. It’s a prototype for a city of the future. The project’s Head of Technology and Digital, Joseph Bradley, has said of the city, “NEOM is not about building a smart city, it is about building the first cognitive city, where world-class technology is fueled with data and intelligence to interact seamlessly with its population.”
The US$500 billion megacity project has been met with some skepticism, especially as it relates to some of the technology MBS reportedly hopes to include: flying cars, automated maids and robot dinosaurs, among them.
The investment is part of MBS’s broader plan to modernize Saudi Arabia, which also included taking Aramco public. When Aramco, the world’s largest fossil fuel producer, became a publicly traded company in 2019, it opened with a market value of US$1.9 trillion.
These efforts at modernization have often been overshadowed, however, by Saudi Arabia’s alleged human rights abuses, including reports that MBS was responsible for the assassination of Jamal Khashoggi, a Saudi journalist and US resident who had been critical of the Crown Prince.
What is green hydrogen?
Hydrogen is the most plentiful element in the universe, but on Earth hydrogen atoms only naturally coexist with other elements, as with the two atoms of hydrogen that combine with one atom of oxygen to create a water molecule. Hydrogen can be used as both a gas and liquid fuel, but to create it, the element must be separated from all other elements.
This is where the distinction between green hydrogen and other forms comes in. The processes by which hydrogen is produced vary in the source of the hydrogen and the energy involved.
The most common process, known as the thermal process (or steam methane reforming), uses steam to break apart hydrocarbon compounds. Examples of hydrocarbon compounds include crude oil, natural gas and coal. The resulting hydrogen from the thermal process is known as “gray hydrogen,” as it also results in the emission of CO2, a leading greenhouse gas.
The “green” alternative to the thermal process is electrolysis. This involves the use of electric currents to break water apart into hydrogen and oxygen. “Green hydrogen” is what is created when electrolysis can be fueled by clean energy sources like solar and wind, as would be the case at the proposed Neom plant.
Hydrogen fuel has long been considered a potential alternative to fossil fuel, which is the leading cause of human-generated climate change. In the 19th century, scientists and visionary thinkers like the author, Jules Verne, speculated that hydrogen could be used as a fuel source. It wasn’t until the 1920s, though, that the first hydrogen-powered engines were developed.
Unfortunately, in 1937, the hydrogen-powered airship, Hindenburg, famously exploded while attempting to dock. It is believed that a spark of static electricity ignited the combustible hydrogen gas, leading to the ship’s explosion and the deaths of dozens of passengers. The exact cause, however, remains up for debate.
The infamous disaster was a public-relations nightmare for the development of hydrogen fuel.
In the decades after the Hindenburg disaster, liquid hydrogen has been used for rocket fuel but it never took off as an alternative to fossil fuel for use by the general public. Scientists have continued to work on the development of hydrogen, with some hypothesizing as early as the 1970s that entire cities could be run on sun-powered hydrogen fuel cells.
Over the years, the US government has invested in the technology, but it has generally supported other alternative energy options, such as electric cars. Recently, though, President Joe Biden has affirmed a commitment to green energy. His recently proposed US$3 trillion infrastructure bill includes funds for developing clean energy, including hydrogen.
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