Norwegian renewable energy company Scatec is now investing in hydrogen plants in Egypt and Oman. With government subsidies in the bag, they want to export green fuel to Europe.
During the Climate Summit in Egypt, Norwegian renewable energy company Scatec launched what will be the first major hydrogen project in Africa.
A green hydrogen plant will be built in Ain Sukhna, outside the capital, Cairo. The hydrogen will be produced from wind and solar power, which Scatec plans to build in the same area.
– In the long term, this is intended for export to Europe, says government contact Enja Sæthren at Scatec.
Scatec has noticed a change of pace from the European Union and is now focusing on development and production in Oman and Egypt. Hydrogen can replace fossil energy in sectors that cannot be directly electrified.
Emerging markets like Egypt, where you have access to cheap renewable energy and land, and we’re totally dependent on it, says Sæthren.
She wouldn’t say anything about the project’s timeframe, but she believes the project will spark interest in developing more renewable energy. Investment costs for the project are estimated at around NOK 2.3 billion, with Scatec holding a 52 percent ownership interest.
receive government support
According to the government communication at Scatec, the most important thing for success in investment projects in developing countries is being present with the time and working with local partners. In addition, they are completely dependent on the state’s contribution to help cope with the risks.
State-owned company Norad recently provided Scatec with NOK 85 million for the company’s hydrogen projects in Africa.
It is Norad’s largest single grant ever to a company, and the first hydrogen project supported by Norad.
– How much do you rely on support schemes?
Support from players such as Norad and Eksfin has been important in launching a number of investments and in maturing projects. It sure is very important. Scatec wouldn’t be where we are today without the Norwegian Toolbox, says Sæthren.
Scatec works with renewable energy projects in a number of African countries. They already have four solar plants in production in South Africa and many more under construction, as well as solar in Mozambique and hydropower in Uganda.
Scatec receives a $1 billion government guarantee: it must provide stable electricity in South Africa
follows the European Union
The obvious challenge to ensuring energy and renewable energy security in Africa is the lack of capital and investment.
Africa has 40 percent of the world’s solar energy potential, but only 2 percent of the world’s renewable energy investment. There’s a funding gap that we’re trying to bridge, says Sæthren.
Green hydrogen requires a lot of energy. What else can electricity go to, renewable investments are in short supply in African countries?
Scatec’s strategy in Africa is to work with all kinds of solutions. Egypt currently has an energy surplus, and this helps to take advantage of the ability to decarbonize existing production and reduce emissions.
She stresses that there are different needs in different African countries.
– For Egypt with an existing high-emitting industry, which has the opportunity to develop affordable renewable energy, it makes sense to develop hydrogen and get into the development of a green hydrogen industry early on, says Sæthren.
She says Scatec works closely with Egypt’s industrial sector, finding that many players have clear decarbonization ambitions and who want to export to Europe.
– What is happening in the European Union now is very important, you say.
Gas works in Africa
Although the European Union is now signaling that it wants a faster energy transition to reduce greenhouse gas emissions while at the same time reducing dependence on Russia, Russia’s gas strangulation of Europe has also created an urgent need for new gas plants.
In 49 out of 54 African countries, fossil fuel companies are looking for new projects, according to one company. to examine From the Urgewald organization. Two-thirds of the companies are European.
And at the climate summit in Egypt, a group of African activists organized demonstrations against it.
Do you have any idea of the massive gas investment in the African countries where you also operate?
In the short term, gas will play a role, but there is a great opportunity for Africa with green hydrogen now that the market is at an early stage. I think a lot of African countries see that, says Sæthren.
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blue, not green
Norway itself has led the way for blue hydrogen. Industry Minister Jan Christian Pfister has discussed, among other things, the exchange of hydrogen with Germany, a pilot plant has been put into operation in Øygarden, and Equinor has entered into a hydrogen collaboration with energy company Engie and is looking at export possibilities from Norway to Europe.
– Norway is very much in favor of blue hydrogen, what do you think about that?
– The reason we’re betting on green hydrogen is because it makes sense in emerging economies, which is what we’re betting on. We don’t work in Norway, says Sæthren, so I can’t comment on how Norway should think back home.
At the same time, it believes that Norway has an opportunity to take a leading role in the development of green hydrogen.
– We have the full value chain with technology players, renewable energy suppliers and large companies such as Yara and the Norwegian shipping industry operating globally.
Norway discusses hydrogen exchange with Germany
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