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Abu Dhabi to tap Kezad for hydrogen plan

10 October 2023

The Khailfa Economic Zones Abu Dhabi (Kezad) is expected to play a key role in the UAE capital's plan to establish a green hydrogen ecosystem.

The sprawling Khalifa Industrial complex, as well as the economic zone's proximity to the Khalifa Port, are expected to incentivise potential green hydrogen and green ammonia production plant developers and investors to locate at Kezad, sources familiar with the plans tell MEED.     

The preliminary plan entails allocating space and land for electrolysis plants, powered by solar, wind or hydro power plants that are connected to the grid.

The hydrogen can then be converted into ammonia, stored in tank farms and exported through specialised vessels similar to liquified natural gas (LNG) carriers.

Kezad, or the Khalifa Industrial complex, is the location of several planned green hydrogen projects, including a $1bn scheme being planned by South Korea's Korea Electric Power Corporation (Kepco) and its plant subsidiary Korea Western Power and Samsung C&T, along with Dubai-headquartered Petrolyn Chemie.

The three companies signed a joint development agreement (JDA) with Abu Dhabi officials for the first phase of the planned scheme in June last year.

Hydrogen policy

Abu Dhabi Department of Energy (DoE) is expected to issue a public policy on low-carbon hydrogen around or during the upcoming Cop28 climate summit, MEED reported on 9 October.

The policy was initially expected to be issued earlier this year.

There are 11 known and planned green hydrogen projects in the UAE, with a budget of at least $12bn, according to MEED data.

In addition to the planned $5bn green hydrogen hub planned between Masdar and Engie, the other major planned green hydrogen projects in  Abu Dhabi involve its largest industrial firms including Abu Dhabi National Energy Company (Taqa), Emirates Steel, Fertiglobe and Brooge.

One of these projects, the 150MW green hydrogen-based ammonia production facility planned in Ruwais, is in an advanced stage of planning and study.

A consortium led by French utility developer and investor Engie in partnership with Fertiglobe and Abu Dhabi Future Energy Company (Masdar) will develop the project. The team expects to take a final investment decision (FID) on the project by the fourth quarter of 2023.

Policy framework

MEED reported in March this year that the Abu Dhabi DoE developed the policy, which was approved by the Abu Dhabi Executive Council, and whose draft was issued for public consultation in October last year.

The policy aims to adopt a clear and robust framework to enable a low-carbon hydrogen economy, including defining Abu Dhabi’s low-carbon hydrogen industry structure and the supporting regulatory mechanism to “provide confidence for both domestic and international investors”.

The suggested industry structure and the institutional design consist of production, storage, transportation and trading.

The policy document states: “In the industry structure conceived for Abu Dhabi, production, trading and supply are open to market, while storage and transportation through pipelines are likely to be natural monopoly arrangement that in due course, will be regulated like other activities in the energy sector.”

MEED understands early-stage regulation will be considered to ensure access to clean energy and water, public safety, security and other key technical standards.

The policy also covers the entire low-carbon hydrogen ecosystem including enabling so-called hydrogen valleys, where different low-carbon hydrogen production technologies can be collocated to drive system-wide cost optimisation, including sharing of infrastructure and facilities.

It also considers clean electricity clusters that will supply power to electrolysers to produce low-carbon hydrogen. These clusters will be partially isolated with only a backup connection to the electricity grid. They are expected to allow large-scale clean electricity generation and supply at a competitive cost.

The policy supports the UAE hydrogen leadership roadmap to capture up to 25 per cent of the global low-carbon hydrogen market by 2030 as well as to be among the top 10 global suppliers by 2031.

It also supports the country’s 2050 net-zero carbon emissions strategy.

The final policy is expected to be issued separately from the Abu Dhabi hydrogen strategy, which was also due earlier this year.

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Jennifer Aguinaldo

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