Desertec Industrial Initiative recently held a web seminar featuring Paul Van Son and Driss Beraho.
The first short presentation by Son was about what the Desertec Industrial Initiative is up to lately. We learn that the vision now exceeds green electrons and has expanded to include green molecules. That is hydrogen made from renewable energy projects. I recall having an interest in hydrogen from the Mongolian Gobi desert 10 years ago. So I was excited to hear about these developments, especially the fact that the European Green Deal program will try to help getting this started too.
The other presentation gave some basic facts about the Neom Helios project.
I was not familiar with Neom. It is the name of a future city in Saudi Arabia where the government intends to invest $500 billion in an area of 26,500 km2 in the North West corner of Saudi Arabia, close to the Red Sea. The Neo part is easily understood as “new”, while M is short for “future” in the Arabian language.
The Neom Helios project will be the largest green ammonia project in the world. The presentation mentioned a scale of gigawatt renewable energy generation. Investments should be around $5 billion to produce renewable ammonia. Ammonia has been chosen over hydrogen because there is more experience with shipping it.
The presentation explains that Saudi Arabia has experience with energy exports and is located conveniently on established shipping routes to key markets. Saudi Arabia and the Neom area in particular has excellent renewable resources. Prices for renewable energy are way down now making it possible that such a project may be online in 2025.
The key market will be the mobility market, saving CO2 emissions in the process.
The water needed for the electrolysis will be provided by desalination. At scale this kind of energy system will use less water than the existing system which needs water to cool power plants.
What can the EU do to make this kind of project a success?
One idea coming to mind is to have feed-in tariffs for green hydrogen. As long as this kind of energy is more expensive than oil, that might help. On the other hand with the prices for the original solar electricity being as low as they are now, maybe there is not so much need for that.
One already existing regulation is the fuel efficiency for cars in place. That is calculated by the average of all sales of a car maker. If you use hydrogen as a fuel, the cars burning that will enter the calculation reducing the average.
Another idea would be to restrict and reduce oil and gas imports to the EU by a long-term predictable schedule. If the EU reduces fossil fuel imports, green molecules will naturally fill the gap.