NEOM Green Hydrogen Company completes financial close of $8.4B for world’s largest green hydrogen plant
23 May 2023
NEOM Green Hydrogen Company (NGHC)—an equal joint venture by ACWA Power, Air Products and NEOM—announced that following signing financial documents with 23 local, regional, and international banks, and investment firms, it has now achieved financial close on the world’s largest green hydrogen production facility at a total investment value of US$8.4 billion.
The plant is currently being built at Oxagon, in Saudi Arabia’s region of NEOM. NGHC has also concluded the engineering, procurement, and construction (EPC) agreement with Air Products as the nominated contractor and system integrator for the entire facility.
Additionally, NGHC also announced that the non-recourse financing structured for the project has been certified by S&P Global (as the second party opinion provider) as adhering to green loan principles and is one of the largest project financings put in place under the green loan framework. Air Products has already awarded major contracts to various technology and construction partners.
NEOM Green Hydrogen Company also secured an exclusive 30-year off-take agreement with Air Products for all the green ammonia produced at the facility, which will unlock the economic potential of renewable energy across the entire value chain.
NGHC’s mega-plant will integrate up to 4GW of solar and wind energy to produce up to 600 tonnes per day of carbon-free hydrogen by the end of 2026, in the form of green-ammonia as a cost-effective solution for the transportation and industrial sectors globally.
NGHC’s financial agreements were concluded through a diverse mix of local, regional and international banks and financial institutions, along with an Euler Hermes (now Allianz Trade) tranche with no fewer than 23 institutions investing in the project.
Earlier in January 2023, Saudi Arabia’s Ministry of Industry and Mineral Resources awarded its first industrial operating license to NGHC, paving the way for the Kingdom to become the world’s leading hydrogen producer, while maintaining its position as a key player in the energy sector.
LOL! They don't have 4GW of solar and wind energy.
Saudi Arabia keeps promising an electricity
transition, but there is near-zero progress so far
Posted by: dursun | 23 May 2023 at 07:52 AM
Saudi Arabia and the UAE now have 3 gig of renewable energy and more is in the construction phase. By the time this green hydrogen plant is built they should be ready for it.
Posted by: Paroway | 23 May 2023 at 10:22 AM
@Paroway another total BS press release
Saudi Arabia: Energy Country Profile
Posted by: dursun | 23 May 2023 at 11:23 AM
Present Saudi renewables output is modest, perhaps of the order of 1GW, but unquestionably massive new capacity is being installed, with costs now much more competitive.
Perhaps the dodgiest aspect of Saudi plans are their claims of how effective and economic carbon capture will be:
Posted by: Davemart | 23 May 2023 at 12:18 PM
Q: What do you do at night when there is no solar - do you turn it off and wait for sun or to you continue with fossil electricity?
I can see this happening with lots of H2 production based on expensive hydrolysers - solar by day, whatever by night (same for wind).
Posted by: mahonj | 24 May 2023 at 09:23 AM
See page 54 here:
First a word of caution:
All the actual figures here are now obsolete, as they are prior to the war in Ukraine, massive inflation etc.
For instance, they were putting green hydrogen becoming competitive against grey some way in the future, but in Europe at least very high natural gas prices have meant that it is already very competitive
Similarly rises in commodity prices mean that, for instance, PEM electrolyser prices have been somewhat stickier than projected, as they use precious metals ( other techs don't )
But the picture is valid.
As electrolyser costs fall, then how many hours you need to run them for to be economic drops rapidly, to below 2000 hours per annum, ie around 25% of the time, with the price of electricity determined for solar by how good the resource is, in the case of Saudi, pretty darn good.
And in for instance western Saudi, very good wind resources mean that total capacity figures are way up:
' They assert that capacity factors can reach 60% in the production of renewable power in Saudi Arabia, that it is possible with a PV-Wind hybrid system. In fact, large areas of the country, especially in the western region, are favourable for diurnal (day and night) solar and wind energy production. This greatly surpasses, for example, wind power in Europe with a capacity factor of about 35%.'
But in any case, although recent events mean that their estimate of $300KW for electrolysis to make them pretty much immune to capacity factors for total cost is now obsolete, and I have no idea what the present figure is, it remains true that relatively cheap electrolysers mean that low capacity factors work OK for total cost.
Of course in Saudi they could always fire up some thermal capacity to keep the electrolysers working 24/7, but it looks as though they might normally be better off getting the kudos of selling 100% green electricity as the cost penalty looks low.
Another major potential supplier of green hydrogen to Europe with similar extensive solar and wind resources, Morocco, has not got oil or gas, so certainly would not be supplementing renewables with them to produce hydrogen.
Posted by: Davemart | 24 May 2023 at 11:50 AM
I suppose Saudi has lots of money, so they can handle the capital costs, especially while getting started.
Morocco, less so, but if they have the renewables, someone else might foot the capital bill (for a cut).
On the current "situation" vs 2021 - "Events dear boy, Events" as Harold Macmillan put it once.
Consumer Electricity prices in Ireland are 2.5x what they were in 2021.
Posted by: mahonj | 24 May 2023 at 12:40 PM
The finance is not really an issue, if the underlying proposition seems sound.
As you say, Saudi can finance whatever it fancies, and another area with wonderful renewables resources, Namibia, is working in conjunction with Germany to develop their resources.
Similarly Australia has Japan, South Korea etc interested in getting as big an involvement as possible.
Posted by: Davemart | 24 May 2023 at 12:54 PM
Not that I think this is the best use for green hydrogen, but it is interesting that it has now been demonstrated that even existing gas plants can accept a blend of 38% hydrogen greatly reducing GHG emissions:
Posted by: Davemart | 24 May 2023 at 02:23 PM
Jim, I have just spotted that Energy Dome, a tech I follow, which uses compressed CO2 for energy storage, has now reached the stage of commercial deployment, with two fully commercial units of 200MWh/20MW being rolled out for completion this year.
With a high RTE, use of standard industrial components, and half the cost of lithium batteries in my view overnight storage for renewables is now a solved problem.
Posted by: Davemart | 25 May 2023 at 02:38 AM