Egypt’s Hydrogen Bet

March 5, 2022


Abundant, cheap, clean-burning and not a fossil fuel. That is the promise of “green hydrogen,” which relies on eco-friendly energy sources to convert hydrogen gas to a compressed liquid fuel that powers machines and emits only water. “A substantial reduction in carbon dioxide is almost impossible without hydrogen,” Christian Bauer, a researcher at Paul Scherrer Institute, told China Dialogue in July.

Another benefit is that hydrogen fuel produces more heat than fossil fuels. “The [hydrogen] gas contains more energy for every tonne than any fossil fuel,” wrote Fred Pearce, author of “The Climate Files, the Land Grabbers and Water Lands, and A Trillion Trees,” in an op-ed on China Dialogue, a news portal.

However, converting hydrogen gas into fuel requires “a lot of electricity,” noted Pearce, especially when using renewables. That makes it very expensive as an alternative to oil and gas using today’s technology. A report from the International Renewable Energy Agency (IRENA) says that green hydrogen would not be competitive with fossil fuels before 2030.

Accordingly, the government’s plans are equally long-term. In October, it announced ambitious plans to produce green hydrogen by 2035. That should help Egypt raise the share of renewables in the national energy mix from 20% last year to 42% by 2035. This year could prove critical to achieving those ambitions, with Mohamed Shaker, minister of electricity and renewable energy, labeling 2022 “the Year of Green Hydrogen.”

However, that could prove challenging. For one, creating supply chains to manufacture, ship and deliver hydrogen is “too cumbersome and inefficient, especially when the infrastructure would have to be built from scratch,” wrote Pearce. Additionally, by the time hydrogen becomes viable, other eco-friendly fuels might be widely adopted. Bauer estimates it will take 10 years to see “substantial developments in hydrogen.”

Egypt’s strategy

So far, the government has focused on signing memorandums of understanding (MoUs) with international energy companies. In August, the electricity ministry signed its first hydrogen-related MoU with Siemens Energy to build a green hydrogen plant with a capacity of 100 megawatts or more.

In October, the Sovereign Fund of Egypt signed an MoU with Norwegian renewable energy company Scatec and Fertiglobe, a merger of Orascom Construction Industries and Abu Dhabi National Oil Co., to build a green hydrogen facility with a capacity of 50 to 100 megawatts to produce eco-friendly ammonia.

In December, Shaker told local media the ministry plans to build five green hydrogen plants by 2030. He noted those would be “pilot projects” the government ultimately would scale up. One of those hydrogen-fuel production plants will overlook the Red Sea and another the Mediterranean, each with direct access to a cargo port for export, said Shaker. “This … will have very large financial returns to Egypt.”

By January, Shaker told the media there were “several MoUs” between the Egyptian Electricity Holding Co. and Egyptian Gas Holding Co. and five international companies for “pilot projects in hydrogen production.” He also announced the ministry had signed an MoU with a “foreign consultancy” to prepare Egypt’s green hydrogen strategy for the next 12 months.

New oil?

Several experts noted that despite the ease with which fossil fuel-powered machines could switch to hydrogen, electric power is leading the way. “Green hydrogen will usually lose out to electricity where the latter can do the job,” Tom Baxter, a chemical engineer at the University of Aberdeen, told the Wall Street Journal in July. “Green hydrogen can never be cheaper than the green electricity needed to make it.”

That is why automakers focus on electric vehicles, hybrid power trains and developing synthetic fuels. Hydrogen fuel “is only ever going to be a niche source of energy,” said Baxter.

Skeptics say that supply chain losses of compressed hydrogen could reach 66%. “Efficiency losses happen … in the production process … and the demand side,” Romain Sacchi, another researcher at Paul Scherrer Institute, told Potsdam Institute for Climate Impact Research in June. That would make hydrogen’s availability “too uncertain to replace fossil fuels,” said Falko Ueckerdt, a senior research scientist at Potsdam.

One use for green hydrogen is manufacturing processes that require heat of 400 degrees Celsius or more, noted Baxter. Trucks, ships and planes also could use hydrogen because electricity would not be practical given their size and weight. “A large truck today would need … a battery weighing a few tonnes to travel more than 1,000 kilometers (621 miles),” said Bauer.

However, those applications are not likely to prove financially feasible anytime soon. “Hydrogen is between five and seven times more expensive than fossil fuels,” said Sarah Mcfarlane, a Wall Street Journal Senior Reporter, in July.

Incentivizing hydrogen

The U.S. administration announced its “Energy Earth Shot” campaign last year to reduce the cost of producing hydrogen by 80% to $1 per kilogram by 2030. That would “catalyze innovation in any hydrogen pathway with potential for meeting the targets — such as renewables, nuclear and thermal conversion — by providing incentives,” said the Office of Energy Efficiency and Renewable Energy. It estimates that would quintuple consumption of hydrogen fuel.

The Clean Energy Ministerial, a high-level global forum to promote policies and programs that advance clean energy technology, has its “H2 Twin Cities” initiative to accelerate hydrogen use by pairing cities worldwide. “As incubators of new ideas and technologies, cities are a key part of the effort to jumpstart innovation and foster solutions to fight the climate crisis,” said Deputy Secretary David Turk in a forum document. “H2 Twin Cities will help us do just that.”

Those pairings could be “Sibling Cities” that are at the forefront of deploying hydrogen technologies. “Mentor-Mentee Cities” would be at different levels of hydrogen implementation.

In Egypt, successful integration of hydrogen to diversify the country’s fuel mix will need government support, similar to the “Green Incentive” program for electric vehicles. Still, as Baxter told the Wall Street Journal: “Setting hydrogen alongside the alternatives that we haveparticularly electrification, it’s there that the hydrogen story starts to unravel.”