The developers of Helios Green Fuels $5bn green hydrogen development on Saudi Arabia’s northern Red Sea coast are already thinking about expansion.

Technology firms Neom and Air Products and Saudi utility Acwa Power signed a deal in July 2020 to build, own and operate the plant.

The current plan is to use a 20 MW Thyssenkrupp electrolyser—powered by 4GW of renewable energy—to make green hydrogen that will be converted into ammonia.

“We are already thinking about expansion” Kaeppner, Neom

The intention is to expand, according to Roland Kaeppner, Neom’s executive director of hydrogen and green fuels.

“We are already thinking about expansion, depending on how fast the market is going to pick up. It just requires an addition of renewable capacity and an expansion of the electrolyser plant,” he says.

The consortium will sign financing agreements to fund the project by the end of 2021.

Each of the partners own an equal share in the project, which will obtain nitrogen from the air and produce 1.2mn t/yr of ammonia. Air Products will be the exclusive buyer of the ammonia with rights to shipping and selling it worldwide.

Tenders to build the renewable electricity capacity will precede the financing agreements and will likely be awarded over the next few months.

Low-risk project

The project is a sound commercial prospect, and the developers do not envisage any problems concluding financing, Kaeppner adds.

“We don't have feedstock risk, we have the [power] generation within the project, and we have a guaranteed offtake agreement with Air Products,” he says.

Helios will produce 650 t/d of green hydrogen at less than $2/kg. Although construction is a technologically complex proposition, each component of the plant is a mature technology.

“I would say the only risk is getting the right operational setup and letting the components talk to each other to perform at an optimum level,” says Kaeppner.

The developers chose to ship the green hydrogen in the form of ammonia because of a lack of hydrogen transportation infrastructure and because ammonia is a versatile end-product.

“There's a lack of infrastructure for liquid hydrogen. A pipeline in our case is an option, but you do not build a pipeline in two years from Saudi Arabia to Europe,” Kaeppner adds.

Green hydrogen

Air Products will likely reconvert much of the ammonia into green hydrogen for use in trucks and buses, Kaeppner predicts. Such a proposition will be able to compete economically with diesel, he says, and represents a viable option for marine fuel, although it is likely to be too costly to yet be a viable feedstock in fertiliser production.

Helios’ location relatively close to the Suez Canal on the main shipping route from Asia to Europe would make it an ideal place for container ships to refuel on green ammonia.

The plant’s electricity will be provided 50pc by wind and 50pc by solar, with solar power likely produced at around the recent record low Saudi tender of $0.0104 kW/h.

Saudi Arabia’s Red Sea coast receives steady winds at night and is sunny most of the year.

However, there will still be times of low power generation. Helios will operate at a capacity factor of 60-70pc and use battery storage as well as being able to ramp up and down production at times of varying renewable generation.

4GW – Capacity of Helios’s renewable electricity plant

Some of the green ammonia from Helios could be sold for domestic fertiliser production, while entire industries could be remodelled and relocated to move closer to the source of raw materials.

Neom is in talks with various domestic state-controlled corporations such as state-owned petchems firm Sabic, miner Ma’aden and NOC Saudi Aramco about further potential partnerships.

“We are also working on other downstream applications,” says Kaeppner. “We will build a hydrogen innovation and development centre to demonstrate some of the technologies around synthetic fuels.”

German industrial conglomerate Thyssenkrupp is part of a partnership manufacturing green hydrogen that it hopes will ultimately replace coal in its steelmaking furnaces. Yet Europe’s renewable capacity limitations and higher production costs will make it tough for such a project to be competitive.

“From a macroeconomic perspective, why would you ship green hydrogen from Chile, Saudi Arabia or Morocco to Europe?” says Kaeppner.

“It would be easier to just shut down the steel plants in Europe and rebuild them at locations where you have cheapest renewable electricity to produce the hydrogen, but this is not what politicians want to hear.”

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Author: Matt Smith