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Grid source optional for Abu Dhabi hydrogen projects

9 November 2023

Developers of green hydrogen projects in Abu Dhabi will have the option to source renewable power through the electricity grid or build renewable energy plants that are integrated into their planned hydrogen and derivatives production facilities.

This is one of the provisions of the emirate's public policy on low-carbon hydrogen policy, which the Abu Dhabi Department of Energy (DoE) has drafted, and which is awaiting final government approval,  Carlos Gasco Travesedo, DoE energy policy executive director, tells MEED.

Travesedo declined to confirm a specific timeline for when the final policy will be issued, despite mounting speculations that it will be issued around or during the upcoming Cop28 climate summit, which the UAE will host from 30 November to 12 December this year.

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 Abu Dhabi Future Energy Company (Masdar) and the French utility developer and investor 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 100MW green hydrogen-based ammonia production facility planned in Ruwais, is expected to reach financial close by the end of the year. 

A consortium led by Engie, in partnership with Fertiglobe and Masdar, will develop the project. The team expects tomakee a final investment decision (FID) on the project by the fourth quarter of 2023.

The consortium also plans to purchase renewable energy from Emirates Water & Electricity Company (Ewec) to power the facility,

Kezad

The Khailfa Economic Zones Abu Dhabi (Kezad) is also expected to play a major role in the UAE capital's green hydrogen strategy.

It is the location of several planned 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.

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 that 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.

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Jennifer Aguinaldo

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