“Potentially trillions in reserves”: New green oil found under the Persian Gulf
While the Persian Gulf region’s oil reserves are widely recognized, green hydrogen is emerging as a valuable new resource in the region. Sustainable, renewable energy has the potential to transform the region’s energy systems just as oil did in the 20th century. Using solar and wind power, the Gulf states could produce trillions of liters of green hydrogen, taking a leading position in the global energy transition.
The game-changing potential of green hydrogen in the Persian Gulf
Renewable energy enables electrolysis, splitting water molecules to produce hydrogen and oxygen, the green hydrogen product. While grey hydrogen produced from natural gas generates large amounts of CO2 emissions, green hydrogen is a completely carbon-free product. Large-scale green hydrogen production fits perfectly with the Persian Gulf region, which has abundant solar and wind reserves.
The GCC countries Saudi Arabia, the UAE and Qatar strongly support the development of renewable energy projects. Previous investments are aimed at achieving two main goals: reducing environmental emissions and opening up new profit opportunities. The UAE could produce green hydrogen using 20% of its solar power plants, generating enough revenue to match its current oil and gas revenues.
Meanwhile, solar and wind are the main ways to produce green hydrogen on a large scale.
Large and economical solar projects are operating in the Middle East. For example, Dubai’s Al Maktoum Solar Park and the Sweihan Solar PV Project are producing electricity at historically low prices. These projects show that the region can produce large-scale renewable energy to enable the production of green hydrogen.
The region is studying the deployment of wind power as a complement to solar power generation. A combined solar and wind power system can provide the continuous electricity needed to produce efficient green hydrogen. The cost of renewable energy in the Gulf region is low, so the production price of green hydrogen is very competitive, close to $1.75 per kilogram.
Green hydrogen production could usher in a new era of prosperity for the Gulf countries.
The adoption of green hydrogen brings many economic and environmental benefits to society. The Gulf countries are using this economic opportunity to provide a new source of revenue to diversify their economies while reducing their dependence on oil revenues. The global green hydrogen market is set to expand rapidly in the coming years as various industries demand sustainable energy solutions for transportation, power generation, and industrial applications.
Green hydrogen production is a powerful tool to reduce greenhouse gas emissions in the environment. Water remains the main byproduct of hydrogen fuel use, making it an environmentally friendly alternative to fossil fuels. Gulf countries can deploy green hydrogen to achieve their climate goals while participating in global climate change mitigation initiatives.
Realizing green hydrogen energy depends entirely on addressing many existing barriers to its full potential. The difficulties faced by electrolysis technology are mainly due to its high cost. Researchers continue to develop technologies that can reduce the cost of electrolysis to match its price with that of traditional fuels and energy.
What’s next? Future challenges and opportunities for hydrogen in the Gulf region
The storage and transportation of hydrogen requires additional infrastructure development to be successful. Gulf countries are pursuing multiple solutions to transport hydrogen as they intend to use it through ammonia conversion. Standard shipping infrastructure allows for the transportation of ammonia and then converting it back into hydrogen where it is needed.
Green hydrogen energy offers meaningful opportunities that go beyond current difficulties and require the development of additional solutions. The production of green hydrogen on a global scale presents an opportunity for the Gulf countries, as they have all the necessary elements, including resources and expertise. Investing in this green oil will bring them future energy leadership and opportunities to build a sustainable world.
The Arabian Gulf region has all the ingredients to quickly become a major player in the emerging green hydrogen market. The region has a multi-trillion-dollar production potential to build a sustainable energy economy using renewable energy resources. Gulf countries can lead the global energy transition by embracing green hydrogen to transform their economies and reduce emissions.
