Egypt is looking to adopt hydrogen technology to further diversify its energy mix

Alongside a rapidly expanding renewable energy segment, Egypt is looking to adopt hydrogen technology to further diversify the energy mix. The construction of green hydrogen facilities will support the government’s plan to establish Egypt as global energy leader in line with Egypt Vision 2030. The International Energy Agency believes that hydrogen will be an integral part of a net-zero emissions future, and many nations seem to agree: from 2019 to 2021 the number of national hydrogen strategies worldwide increased from three to 17. While the global capacity of electrolysers used to produce hydrogen was less than 1 GW in 2021, international interest in the technology is rising.

Strategy

The Egyptian authorities have established a committee to develop a $40bn national hydrogen strategy, which was set to be unveiled by June 2022. The strategy will detail ambitious plans to achieve 1.4 GW of hydrogen output by 2030. The European Bank for Reconstruction and Development is supporting the committee, with investment to come from the European Commission’s Innovation Fund and various climate funds. The Egyptian government is also set to include green hydrogen in the revision of its Integrated Sustainable Energy Strategy (ISES) 2035.

Egypt’s renewable energy output is anticipated to increase from 3.5 GW in 2020 to 13.7 GW in 2030 and cover 42% of the country’s energy demand. The government has driven the uptake of public-private partnerships across the energy sector through favourable policy implementation under ISES 2035 and Vision 2030. At present, wind and solar power dominate Egypt’s renewable energy segment, and additional projects of this kind are under way. Egypt therefore has wide scope to develop a green hydrogen industry, where the “green” factor refers to the use of renewable energy to power the electrolysis process.

In August 2021 the Egyptian Electricity Holding Company (EEHC) signed a memorandum of understanding with Siemens Energy to develop Egypt’s hydrogen industry with a view to export. The two firms will work together to promote investment, technology transfer and the implementation of projects related to hydrogen production. The partnership will focus on the acceleration of green hydrogen production with a pilot project comprising 100-200 MW of electrolyser capacity.

Project Plans

Three foreign consortia applied to establish green hydrogen plants in the Sokhna and East Port Said areas in 2021. The government was considering the applications as of the first quarter of 2022 and is expected to announce various green hydrogen projects at the COP27 UN Climate Change Conference, to be held in Sharm El Sheikh in November 2022. Hydrogen plants would benefit from the Suez Canal link between Europe and Asia for the transport of materials.

Egypt is slated to host the world’s largest green hydrogen plant as a consortium consisting of Norwegian renewable energy firm Scatec, Abu Dhabi-based fertiliser producer Fertiglobe, the Sovereign Fund of Egypt and Cairo-based engineering contractor Orascom plan to build a 100-MW facility before COP27. The project will use an electrolyser from US firm Plug Power to produce green hydrogen that can be used to manufacture 90,000 tonnes of green ammonia to be exported as fuel. Italian oil and gas major Eni, which already has fossil fuel operations in Egypt, signed an agreement with the EEHC and the Egyptian Natural Gas Holding Company in 2021 to assess the potential for a green hydrogen project. Eni also hopes to use carbon capture and storage technology to convert gas into blue hydrogen to help decarbonise its existing operations.

Publishing a comprehensive national hydrogen strategy in 2022 will help to facilitate the establishment of new green hydrogen projects going into 2023. Egypt has already attracted significant interest from the private sector to develop the hydrogen industry in collaboration with the EEHC, which supports the government’s goal of diversifying the energy mix and promoting Egypt as a renewable energy centre in the MENA region.