Green Hydrogen Plant in Saudi Desert Aims to Reshape Energy Grid

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Green Hydrogen Plant in Saudi Desert Aims to Reshape Energy Grid

Can a multibillion-dollar project in the Saudi desert jump-start the demand for green hydrogen, an elusive energy source that could help eliminate carbon emissions from vehicles, power plants and heavy industry?

The allure of hydrogen is undeniable. Unlike oil and natural gas, it doesn’t emit carbon dioxide and other greenhouse gases when burned. It’s more easily stored than electricity generated by wind turbines and solar farms, and it can be transported by ship or pipeline. Green hydrogen, which is produced using renewable energy sources, is especially attractive as a fuel. It’s made from water rather than methane or other hydrocarbons.

But those who foresee a green hydrogen future face a quandary: The high cost of producing the odorless, colorless, flammable gas can be mitigated only by large-scale projects, which in turn make economic sense only if there is a widespread market for green hydrogen. That doesn’t yet exist.

In Neom, a planned megacity of the future now taking shape in northwestern Saudi Arabia, the investors behind the green hydrogen project think they can deliver the chicken and the egg.

The initiative—a joint venture of Neom, U.S. chemical company Air Products & Chemicals Inc., and Saudi Arabia’s ACWA Power—will invest $5 billion to build what will be the world’s largest green hydrogen production facility. Another $2 billion will be invested in distribution infrastructure in consumer markets around the world, primarily to fuel industrial vehicles and public buses.

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