Construction of Green-Hydrogen Plant in Neom to complete in 2026
Saudi Arabia’s biggest renewable-energy firm is a member of the
consortium leading the project. Other companies include U.S.-based Air Products
& Chemicals Inc.
“We expect to complete the full financing before the end of this
year,” Padmanathan said at the COP27 climate summit in Egypt. “We are almost
done.”
The equity partners have put in about $900 million of their own
money, he said.
Saudi Arabia wants to be the world’s main exporter of hydrogen.
The fuel only emits water vapor when burned, making it less polluting than oil,
natural gas and coal. The technology for producing it on a mass-scale is still
unproven, but the market could be worth $700 billion annually by 2050 if
manufacturers can bring down costs, according to BloombergNEF.
The green variety of the fuel is made when solar and wind power
are used to split water atoms. State energy firm Saudi Aramco is leading the
kingdom’s efforts to produce blue hydrogen, which is manufactured by converting
natural gas and capturing the carbon dioxide emitted in the process.
Rising costs
Higher interest rates and inflation have been “very challenging”
for the Neom and other renewable projects, Padmanathan said. Supply chains have
been disrupted by the coronavirus pandemic and the conflict in Ukraine, pushing
up the price of equipment, he said.
Earlier this month, he told Bloomberg costs for solar-power
projects will rise for the next five to seven years.
Still, he has “zero concern” that the attractiveness of renewable energy will be eroded relative to fossil fuels, prices for which have soared this year.
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