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  Oman eyes first green hydrogen offtake this year

  5 February 2025

  One of the consortiums that won Oman's green hydrogen land block auctions is expected to reach an offtake agreement sometime this year.

  "We are expecting to announce an offtake agreement hopefully sometime this year," said Rumaitha Al-Busaidi, business development manager at Hydrogen Oman (Hydrom), the main orchestrator of Oman's green hydrogen programme.

  Hydrom has signed land concession agreements with teams led by Denmark's Copenhagen Infrastructure Partners, South Korea's Posco and France's Engie, Japan's Marubeni, France's EDF, and a team comprising London-based Actis and Australia's Fortescue in the first two rounds of its land auctions.

  Oman has also signed what it refers to as legacy projects with other teams led by Belgium's Deme, BP and Shell.

  A long-term offtake agreement for the products produced by these facilities is the main requirement for the projects to reach financial investment decision (FID), which the majority of the consortiums aim to achieve by 2027, except for the Deme-led Hyport Duqm, which aims to reach FID in 2026.

  Al-Busaidi also said they expect to launch the third round of Oman's green hydrogen land auctions before the end of the first quarter of 2025. 

  They are fine-tuning the next auction process and considering several options including one similar to the first two auctions, where land parcels were auctioned for the production of green hydrogen and derivatives including ammonia, methanol and sustainable aviation fuels, among others.

  The other option being considered is auctioning land parcels for downstream industries that offtake green hydrogen and its derivatives including green steel, fertilisers and other sectors.

  A final option is a so-called double-sided auction to facilitate contracts between domestic green hydrogen producers and downstream offtakers.

  In December, MEED reported that Oman was making good progress compared to other states in the Middle East and North Africa (Mena) region that are looking to establish green hydrogen hubs to help decarbonise key industries in fossil fuel-scarce jurisdictions globally.

  "We are doing very well," Abdulaziz Al-Shidhani, managing director of Hydrogen Oman (Hydrom), told MEED, noting that Oman has signed legally binding, 47-year project development agreements with eight consortiums under the Hydrom public auction and its legacy programme. 

  Each consortium is understood to have aligned with the sultanate's goal of having a green hydrogen production capacity of 1.4 million tonnes a year (t/y) by 2030 by committing to deliver a capacity of 150,000 t/y by the end of the decade.

  Alternative derivatives

  Hydrom is exploring liquid hydrogen collaboration with another European-based entity, the Port of Amsterdam, to deliver liquid hydrogen to the Netherlands and other perceived demand centres in Europe, as well as to markets in Asia – primarily Japan, South Korea and Singapore.

  While most of the project development agreements signed by Hydrom and the developer consortiums expect ammonia to be the primary derivative, Al-Shidhani says liquid hydrogen has recently been emerging as a viable alternative, with potential uses for the product including applications in the mobility sector and as a maritime fuel.

  "Developers and end-users are exploring all technologies and assessing the feasibility of other alternative derivatives," he says. He adds that cracking ammonia back to hydrogen, as originally envisaged by most projects, involves high costs.

  Creating local demand

  While the assumed markets for the output of the planned multibillion-dollar projects in Dhofra and Duqm are overseas, Oman's long-term objective includes attracting foreign direct investments in the entire green hydrogen supply chain, including solar and wind turbine production and manufacturing.

  "We will enable the platform to foster a sustainable supply chain and it will be up to the private sector to determine suitable strategies, which we are assuming will be export-focused in the early phases of the projects," Al-Shidhani says.

  MEED understands that the 2030 green hydrogen production target will require up to $50bn of investment, including 18GW of electrolyser capacity and 35GW of renewable energy capacity.

   

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  Egypt approves Russian nuclear financing amendment

  4 February 2025

  The Egyptian House of Representatives has approved a report, previously ratified by the North African nation's Energy & Environment Committee, that amends the government financing agreement between Egypt and Russia over the El-Dabaa nuclear power plant in Matrouh.

  The agreement secures a government export loan from Moscow to support the construction of Egypt’s first nuclear power plant.

  According to a local media report, the decree was reviewed by a joint committee that included members of the Energy & Environment Committee, as well as representatives from the Planning & Budget, Economic Affairs and Foreign Relations Committees.

  The amendments to the financing agreement aim to "align the loan's terms with the project's implementation schedule".

  The report did not disclose the nature of the financing amendment that has been approved.

  Financing details

  Egypt and Russia signed the initial inter-governmental agreement for the North African state’s first nuclear facility in November 2015.

  MEED understands that the existing agreement entails an 85:15 project financing split between Russia and Egypt.

  The project is expected to cost between $25bn and $30bn.

  According to industry sources, the funds Russia is providing are payable over 22 years in 43 semi-annual installments, with the first installment due on 15 October 2029.

  MEED understands Egypt can repay the loan in US dollars or Egyptian pounds, whichever suits the Russian party better, and that "a very affordable" 3% annual interest rate applies.  

  The power plant will be equipped with four Russian-designed, 1,200MW VVER reactor units.

  When complete, the El-Dabaa nuclear power plant is expected to generate more than 10% of electricity production in Egypt.

  The plant’s first reactor is scheduled to be operational in 2026.

  Russia’s State Atomic Energy Corporation (Rosatom), the project’s main contractor, announced that it started the production of electrical components in Saint Petersburg for a reactor vessel for the plant in June 2022.

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  Jennifer Aguinaldo
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  Abu Dhabi plans estimated 10GW data centre capacity

  4 February 2025

  

   

  Abu Dhabi is planning to invest in data centres with a total combined IT load capacity equivalent to an estimated 10,000MW.

  According to industry sources, the locations that are being considered are in Abu Dhabi's Dhafra region, previously known as the Western or Al-Gharbia region, including one close to the Barakah nuclear power plant.

  In addition to the nuclear power plant, which has a total nameplate capacity of 5,600MW, Abu Dhabi's second utility-scale solar photovoltaic (PV) independent power project is located in Al-Dhafra.

  Abu Dhabi National Energy Company (Taqa) is also procuring an open-cycle gas turbine (OCGT) plant to be located in the region. The Al-Dhafra OCGT plant is being tendered on a fast-track basis and is expected to have an installed capacity of 1,000MW-1,100MW.

  State utility offtaker Emirates Water & Electricity Company and Abu Dhabi Future Energy Company (Masdar) have yet to disclose the locations for the gigawatt-scale solar PV and battery energy storage system (bess) plants that they are planning to develop as part of the UAE's national net-zero target and artificial intelligence (AI) strategy.

  The project comprises 5,200MW solar PV and 19 gigawatt-hour (GWh) bess plants that are expected to supply 1,000MW of round-the-clock renewable power.     

  Experts have advised colocating data hyperscale centres, particularly those designed for training AI large-language models that have an electrical output similar to small towns or cities, with power generation sources.

  This helps bypass complex and time-consuming grid connection upgrades and approvals processes and minimises energy waste.

  Data centres designed for inferencing AI models, however, need to be built close to load centres or cities for improved latency.  

  "Lots of data centre project activity in Abu Dhabi at the moment," said a senior technical consultant, who also cautions there might be duplications in terms of these "concept projects".

  Karen Young, senior research scholar at Columbia University’s Centre on Global Energy Policy, also observes the uptick in project activity, as well as in policies directly related to AI and data centres in the UAE.

  "It's a lot to keep track of, and the new doubt that we may be able to do supercomputing with less power and investment, and cheaper inputs, makes the race for energy infrastructure and data centre placement slightly more risky," she tells MEED.

  Related read: DeepSeek complicates regional data centre choices

  "All the same, the UAE has made a strategic decision to lead the space and it changes the global landscape of where this advances and which countries have advantages to control it."

  GCC data centre market

  Over $10.6bn-worth of data centres, some catering to hyperscalers such as Amazon Web Services and Microsoft, are planned to be developed and built in the GCC states, according to the latest available data from regional projects tracker MEED Projects.

  This is a conservative estimate, given potential investments such as the $5bn planned between US asset investment firm KKR and the UAE-based Gulf Data Hub.

  It also excludes spending by government entities to develop AI capabilities in defence, security, healthcare and energy.

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  Jennifer Aguinaldo
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  UAE data centre policy highlights AI-energy nexus

  4 February 2025

  Commentary
  Jennifer Aguinaldo
  Energy & technology editor

  The UAE National Team for Reviewing the Impact of Data Centres on the Energy Sector held its inaugural meeting on 3 February.

  The UAE Ministry of Energy & Infrastructure (MoEI)-attached entity was formed to assess the impact of data centres on the domestic energy sector and to work on developing a federal policy aimed at regulating the operation of local data centres.

  Sharif Al-Olama, undersecretary for energy and petroleum affairs at the MoEI, said the formation of the national team is part of the state's strategic efforts towards digital transformation and enhancing sustainability in the energy sector.

  This development follows significant initiatives aligned with the UAE's national artificial intelligence (AI) strategy.

  For instance, Emirates Water & Electricity Company and Abu Dhabi Future Energy Company (Masdar) announced the $6bn "gigawatt-scale" solar photovoltaic (PV) and battery energy storage system (bess) project in Abu Dhabi in mid-January.

  The project, comprising 5,200MW of solar PV and a 19 gigawatt-hour (GWh) bess plant, is expected to provide 1,000MW of round-the-clock, baseload renewable power.

  The UAE leadership has said this project will help advance AI and other emerging technologies while contributing to its 2050 net-zero target.

  Advanced AI models require the construction of hyperscale – large-capacity and low-latency – data centres, which consume large amounts of electricity, impacting consumption, supply, planning and carbon emissions.

  A federal policy could help streamline the entire ecosystem and mobilise plans to ensure no single point of failure once all the planned data centres start operating.

  This move comes a few months after the UAE cabinet approved the state's international AI policy in October, which focuses on advancement, cooperation, community, ethics, sustainability and security.

  In addition to helping shape future standards and guidelines in AI diffusion, the UAE foreign AI policy advocates "transparency and built-in checkpoints within AI tools, enabling governments to enforce ethical standards and implement accountability measures".

  Investors and data centre operators will be watching these evolving policies with great interest to ensure compliance, and to see what impact they might have on capital and operating expenses, if any. 

  

   

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  Jennifer Aguinaldo
• 
  UAE government eyes federal data centre policy

  3 February 2025

  A UAE national team has been formed to assess the impact of data centres on the domestic energy sector and work on developing a federal policy aimed at regulating the operation of local data centres.

  The UAE Ministry of Energy and Infrastructure (MoEI)-attached national team held its first meeting in Dubai, Emirates News Agency (Wam) reported on 3 February.

  At its inaugural meeting, the National Team for Reviewing the Impact of Data Centres on the Energy Sector, explored the development of data centres in the UAE and their influence on the local energy sector.

  The report added: "It also highlighted the challenges facing data centres, ways to make them more sustainable, and the importance of adopting global best practices to ensure efficient operation of these centres".

  Related read: AI chip restriction may slow down GCC data centre boom

  The team is tasked with a"nalysing and reviewing the impact of data centres on energy demand, evaluating the local market and projected economic return for this key sector, identifying all data centres in the country and classifying them according to specific standards".

  The team will also conduct a geographical study of the distribution of current and future data centres to ensure optimal infrastructure distribution, perform benchmark comparisons to review global best practices in data centres, and work on developing a federal policy aimed at regulating the operation of local data centres.

  Sharif Al-Olama, Undersecretary for Energy and Petroleum Affairs at MoEI and Saif Ghubash, assistant undersecretary for Petroleum, Gas, and Mineral Resources at MoEI participated in the meeting, along with key team members from various ministries including the Ministry of Industry and Advanced Technology, the Ministry of Climate Change and Environment, the Telecommunications and Digital Government Regulatory Authority, the Artificial Intelligence, Digital Economy, and Remote Work Applications Office, among others.

  Related read: AI underpins 5GW Abu Dhabi solar project

  During the meeting, Al-Olama underscored the importance of collaboration among member entities to achieve the team's objectives, including adopting innovative solutions to reduce energy consumption and enhancing the operational efficiency of data centres.

  He added that the formation of the National Team is part of the country's strategic directions towards digital transformation and enhancing sustainability in the energy sector.

  He emphasised the need to develop innovative solutions to ensure a balance between the demands of technological development and the sustainability of energy resources in alignment with national goals.

  Al-Olama also highlighted the importance of establishing a comprehensive framework that includes analytical studies and clear recommendations based on accurate data, which will contribute to making strategic decisions capable of achieving the country's energy goals, particularly in clean and renewable energy.

  Close to $2bn worth of data centre projects are under construction in the UAE, according to latest available MEED Projects data.

  Over $10.6bn-worth of data centres, some catering to hyperscalers such as Amazon Web Services and Microsoft, are planned to be developed and built across the GCC states.

  Photo credit: Wam

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  Jennifer Aguinaldo