Energy Transition

Eng. Anas Aljuaidi, CEO, Mannesmann Energy. (Image source: Mannesmann Energy)

Abu Dhabi-based Emirati fully independent EPC contractor and technology integrator MMEC Mannesmann has rebranded as Mannesmann Energy, reflecting its increased focus on new energies and support for the energy transition

Oil Review Middle East spoke to its CEO, Eng. Anas Aljuaidi, who explained the rationale behind the new brand identity, officially announced at the Investing in Green Hydrogen conference in London in September.

Aljuaidi explains that the company, with its MMEC Mannesmann heritage, has a strong background in oil and gas, construction and heavy engineering, but has since 2020, when it became a wholly-owned Emirati company, diversified into renewable energy and sustainability sectors.

“We are still supporting the decarbonisation of oil and gas, in for example EOR projects, but are looking to do more in renewable energy and energy generally, in support of the energy transition,” Aljuaidi says. The new name therefore more accurately reflects the scope of the company’s activities, with 50-70% of its projects envisaged to be in renewables by 2030.

Mannesmann Energy plays a key role in the UAE’s energy transition, focusing on low-carbon pilot projects and contributing to decarbonisation and net-zero goals. Its expertise supports the UAE Hydrogen Strategy by accelerating the adoption of advanced technologies through strategic partnerships with leading renewable sector providers. Eng. Aljuaidi notes that the company was the first contractor in the UAE to be involved in green hydrogen, having acted as the EPC contractor for the supply and operation of a high-speed hydrogen refuelling station in Masdar City, the first of its kind in the region, with recharging capabilities of 750 bar. It is about to announce its second blue hydrogen project in the region.

“We are emphasising our capabilities as an EPC contractor and technology integrator, and adding value from an engineering perspective to accelerate hydrogen implementation in the UAE,” he says. “Our ambition is to keep the highest market share when it comes to clean energy and clean hydrogen, whether blue or green, to support the UAE’s hydrogen strategy.

“Being a technology integrator is our strength, as we can work with any technology to meet our clients’ expectations. That’s one of our areas of expertise. We have an excellent engineering team with international expertise that can evaluate technologies and advise the project developer on the best technology for the application, and how to reduce the CAPEX and OPEX cost to make it more viable for the market.”

Keeping costs down

While hydrogen is rapidly gaining momentum, the cost of developing projects can be prohibitive, with many calling for increased government support and incentives. Eng. Anas Aljuaidi has a strong opinion on this.

“Our philosophy is that is we should not rely on governments to bring costs down; there is a lot we, the EPC companies, can be doing ourselves to reduce costs, for example expanding our supply chain by engaging new technology providers and SMEs rather than going to the top tier companies, whose costs are often unbelievably high, and by using competitive sources of components. In any hydrogen project, the electrolyser accounts for only 20% of the total cost; 80% is accounted for by the EPC. So the project developer should engage the EPC contractor at an early stage to reduce the risk and costs. That’s how we can really accelerate hydrogen production.”

So there is always room for reducing the price, but you can only do that by engaging the EPC contractor.

“When it comes to the OEMs, we can help them as well by advising them on the right elements for their electrolysers or their products. These should be obtained locally or where they are readily available, to avoid unnecessary transportation costs and the risk of supply chain disruption.

“Some elements are by nature very expensive, so it is important to select a competitively priced element to keep the end product cost lower. In China an electrolyser based on alkaline technology can costs US430,000 per kilowatt, compared with US$1,400,000 per kilowatt in Europe. That’s a massive difference and will have a big impact on the project capex.

“The project developer needs to select the right geographic location for their development and ensure that it is near to its customers, to avoid unnecessary costs, such as those entailed by converting hydrogen to ammonia for transportation and cracking it back to hydrogen when it reaches its destination.

“So instead of complaining that governments are not giving incentives, or not paying premiums, EPCs should take it upon themselves to reduce the costs, then everyone will come to you and purchase from you. That is how we, as EPC contractors can guide our customers to enable them to accelerate hydrogen implementation, and we are involved in some early-stage projects where we are doing this.”

Supporting localisation

Mannesmann Energy is also supporting the UAE’s efforts to localise electrolyser manufacturing in the country. Aljuaidi comments that the UAE is one of the most advanced countries when it comes to enabling clean energy, with the ‘Make it in the Emirates’ programme offering incentives for local manufacture, thereby enabling companies to produce products at a competitive price (hydrogen is one of the priority sectors). The Emirates Development Bank also provides financial support for businesses in strategic sectors, including renewables. Progress has been encouraging, and Aljuaidi is optimistic about the future.

“A number of agreements were signed during the Make it in the Emirates Forum last year and this year,” Aljuaidi says. “It’s a new market, and it will take time for projects to get off the ground, but I am sure it will come.”

Further support is needed to get low-carbon hydrogen projects off the ground. (Image source: Adobe Stock)

A new report from the IEA finds that investment and projects in low-emissions hydrogen are growing, but it still accounts for less than 1% of total hydrogen production.

The IEA’s annual Global Hydrogen Review 2024 finds that the momentum for low-emissions hydrogen is growing, as illustrated by a wave of new projects, despite challenges due to regulatory uncertainties, persistent cost pressures and a lack of incentives to accelerate demand from potential consumers. The number of projects that have reached final investment decision has doubled in the past 12 months, which would increase today’s global production of low-emissions hydrogen fivefold by 2030. The total electrolyser capacity that has reached final investment decision now stands at 20 gigawatts (GW) globally. Global electrolyser manufacturing capacity doubled in 2023, with China accounting for 60% of this.

If all announced projects are realised worldwide, total production could reach almost 50 million tonnes a year by the end of this decade. However, this would require the hydrogen sector to grow at an unprecedented compound annual growth rate of over 90% between now and 2030.

Lack of clarity on government support, along with uncertainly around demand and regulatory frameworks means that installed capacity for electrolysers and low-emissions hydrogen volumes remain low, with most potential production still in planning or early-stage development, with some larger projects facing delays or cancellations due to these barriers along with permitting challenges or operational issues.

“The growth in new projects suggests strong investor interest in developing low-emissions hydrogen production, which could play a critical role in reducing emissions from industrial sectors such as steel, refining and chemicals,” said IEA executive director Fatih Birol. “But for these projects to be a success, low-emissions hydrogen producers need buyers. Policymakers and developers must look carefully at the tools for supporting demand creation while also reducing costs and ensuring clear regulations are in place that will support further investment in the sector.”

The report highlights a gap between government goals for production and demand, as well as technology and production cost pressures, with progress in electrolysers in particular stalling due to higher prices and tight supply chains. A continuation of cost reductions relies on technology development, as well as optimising deployment processes and moving to mass manufacturing to achieve economies of scale.

Unabated fossil fuels continue to dominate

Despite the growth in momentum, the report points out that low-emissions hydrogen accounted for less than 1% of total hydrogen production in 2023. Producing renewable hydrogen today is generally one-and-a-half to six times more costly than unabated fossil-based production, the IEA notes. It forecasts that hydrogen production is likely to continue to be largely dependent on unabated fossil fuels this year, with unabated natural gas accounting for around two-thirds of total production. The Middle East is a key player, producing 20% of all hydrogen from unabated natural gas.

China leads in terms of production, accounting for almost 30% of the global total, followed by the USA and Middle East with 14% each, and India with 9%. Total hydrogen production reached 97Mt in 2023, and could approach 100Mt by the end of 2024.

Industrial hubs – where low-emissions hydrogen could replace the existing large demand for hydrogen that is currently met by production from unabated fossil fuels – remain an important untapped opportunity by governments to stimulate demand, the IEA says.

The Middle East saw stronger growth in hydrogen demand than other regions (more than 6% growth year-on-year, due to an increase in demand in refining and methanol production). The region accounted for 14% of hydrogen use in 2023. The Middle East was the second largest consumer of hydrogen in industrial applications after China, with 4% growth, mainly driven by methanol production.

ZSW and Ecoclean employees jointly celebrated the commissioning of the first EcoLyzer. (Image source: Ecoclean GmbH)

The Zentrum für Sonnenenergie- und Wasserstoffforschung Baden-Württemberg (Centre for Solar Energy and Hydrogen Research Baden-Württemberg) and Ecoclean GmbH have brought the first production-ready EcoLyzer electrolyser into operation for green hydrogen production

The P200, which consists of two modular units and has an output of one megawatt, for the production of around 200 Nm³/h of hydrogen, is based on a modular system concept that the partners developed together as part of the "EcoLyzer BW" joint project, the aim of which was to develop an internationally competitive electrolysis system for the series production of green hydrogen. The modular concept enables the cost-efficient construction of plants with a system output of 1 to 20 MW close to the energy source.

"We had our first contact with the ZSW and hydrogen around three years ago and today we are producing the first green hydrogen with the P200," said Manfred Hermanns, director Sales & Customer Services at Ecoclean GmbH. "The collaboration with the ZSW helped us enormously to develop a product ready for series production and put it into operation in such a short time."

After the remaining test phase of the EcoLyzer, it will be delivered to the Rheinisch-Westfälische Technische Hochschule (RWTH) Aachen, where it will produce green hydrogen for the Chair of Thermodynamics of Mobile Energy Conversion Systems (TME).

Efficient hydrogen production

Technologically, the EcoLyzers are based on a system technology for alkaline pressure electrolysis developed and optimised by ZSW over the last 10 years. In contrast to other electrolysis processes, this technology for efficient hydrogen production does not require any resource-critical raw materials such as precious metals and rare earths. In addition, it can be easily scaled up to higher performance classes and is characterised by low-maintenance operation.

Parallel to the development of the electrolysis system, the machine and plant manufacturer has built up production capacities for the series production of electrolysers, which are already available on the market. In the first stage, production is designed for an output of 200 MW per year and can easily be doubled depending on market developments. The modular design enables cost-effective production of the electrolysers with comparatively short delivery times. They can be easily adapted to different applications in the areas of mobility, industry, energy and neighbourhood supply for on-site hydrogen production.

Hilko den Hollander and Stefan Kranz, global energy industry managers, KROHNE. (Image source: KROHNE)

In an exclusive article for Oil Review Middle East, Hilko den Hollander and Stefan Kranz, global energy industry managers, KROHNE, discuss the vital role of measurement technology in hydrogen custody transfer

Hydrogen is gaining traction as a versatile energy carrier that can help to decarbonise industries ranging from chemicals to heavy industry. Its applications are diverse, from powering fuel cells to being used as a feedstock in chemical processes. However, the successful integration of hydrogen into the global energy infrastructure hinges on critical aspects, such as precise and reliable measurement technology. From ensuring accurate custody transfer to complying with international standards and avoiding carbon emission penalties, measurement technology is one of the linchpins that holds the hydrogen economy together.

Custody transfer is a vital phase in the supply chain of any energy commodity, involving the precise measurement of the quantity and quality of the commodity being transferred. For traditional hydrocarbons, well-established technologies and standards exist to facilitate this process. However, the introduction of hydrogen and other low-carbon energy carriers necessitates new approaches. Hydrogen's unique properties, including its low density, high diffusivity, and potential for material embrittlement, present significant challenges in production, transportation, and storage. Addressing these challenges requires advanced measurement technologies that can ensure the accuracy and reliability of hydrogen handling, particularly during custody transfer—the point at which ownership of the energy commodity changes hands.

Accurate measurement essential

Accurate measurement during custody transfer is essential for several reasons. Firstly, it ensures that both the buyer and the seller are protected in the transaction, with the correct amount of hydrogen being accounted for. Secondly, accurate measurement is crucial for regulatory compliance, particularly in light of global standards and legislation that govern the hydrogen economy.

Beyond the economic implications, accurate measurement is also critical for ensuring safety in hydrogen custody transfer. The hazardous nature of hydrogen necessitates the use of advanced measurement systems that are not only precise but also equipped with diagnostic and monitoring features to detect potential issues before they escalate. Adherence to global regulations governing the handling and transportation of hydrogen is essential for avoiding legal liabilities and ensuring the safe and efficient transfer of hydrogen.

As the hydrogen economy continues to develop, the role of measurement technology will become increasingly important. The industry is moving towards greater digitalisation and automation, with advanced sensors and data analytics playing a key role in optimising custody transfer operations. Future developments in measurement technology are likely to focus on enhancing accuracy, reliability, and integration with digital platforms for real-time data analysis.

Moreover, as hydrogen production and distribution networks expand globally, there will be a growing need for standardised and scalable measurement solutions.

Companies like KROHNE are developing the advanced technologies needed to address these challenges, providing measurement solutions that are both accurate and compliant with international standards.

By adhering to global standards and leveraging advanced measurement tools, the energy sector can support the safe, efficient, and sustainable transfer of hydrogen, paving the way for a cleaner and more secure energy future.

The full article is published in the latest issue of Oil Review Middle East.