Global interest in clean hydrogen surges as Mideast works to boost supply

The Middle East is home to some of the world's biggest green hydrogen production projects. (Shutterstock)
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Updated 27 July 2021

Global interest in clean hydrogen surges as Mideast works to boost supply

  • Hydrogen could account for 25 percent of global energy consumption by 2050

DUBAI: Interest in clean hydrogen is rising across the globe, as countries explore ways to decarbonize, a new World Energy Council report showed.

Hydrogen could account for between 6 percent and 25 percent of global energy consumption by 2050, according to the publication titled Hydrogen on the Horizon: ready, almost set, go?.

Different regions play a role in the current hydrogen energy transition, the report said, with countries in the Middle East and North Africa focusing on the supply side.

Saudi Arabia, in July, unveiled plans for a $5 billion green hydrogen facility – the world’s largest such project at the time. Other Middle East countries, including the UAE, Oman and Egypt have also announced major projects to exploit the expected demand.

An earlier report by Dii Desert Energy and Roland Berger said the Gulf region alone could create a $200 billion green hydrogen industry by 2050.

The region also benefits from its strategic geographic location being between the European and Asian markets, which the World Energy Council report described as demand-focused markets.

Different countries also have different ideas of how to utilize clean hydrogen, the report said.

Asia shows a greater focus on hydrogen as a liquid fuel in the form of ammonia, and as a fuel for shipping and road transport, while Europe wants to use hydrogen to decarbonize hard-to-abate sectors such as heavy industries and mass transportation.

“How countries want to produce and consume clean energy, and their immediate national priorities, will shape large-scale hydrogen development and end-user uptake,” Angela Wilkinson, Secretary General and CEO of the World Energy Council said.

It is important to identify user priorities to “better understand hydrogen’s real potential,” she said.

Jeroen van Hoof, global energy, utilities, and resources leader at PwC said this decade is crucial to develop hydrogen projects – including infrastructure to produce, import, distribute and use hydrogen at a large scale.

“If we do this successfully over the next few years, it can pave the way for hydrogen demand to grow exponentially beyond 2030,” he added.

But the report identified several challenges in this global endeavor, including concerns on the cost of low-carbon hydrogen, which is still more expensive than other energy sources.

The report said countries need to collaborate to create a global value chain and unlock the potential of hydrogen for the global economy.

Goldman Sachs scoops up digital lender GreenSky to boost consumer banking

Updated 16 September 2021

Goldman Sachs scoops up digital lender GreenSky to boost consumer banking

  • Atlanta-based GreenSky has provided home improvement loans to about 4 million customers since being founded in 2006
  • Digital businesses that bring in new customers or unique technologies have become more attractive

Goldman Sachs Group Inc. on Wednesday agreed to buy GreenSky Inc, a fintech platform that provides home improvement loans, in an all-stock deal valued at $2.24 billion, as the Wall Street bank looks to grow its consumer unit.
Atlanta-based GreenSky, which went public in 2018 at a valuation of about $4 billion, has provided home improvement loans to about 4 million customers since being founded in 2006.
Digital businesses that bring in new customers or unique technologies have become more attractive, with the pandemic boosting the importance to online activity, while the role of bank branches diminishes.
The deal implies a price of $12.11 for each GreenSky share, representing a 56 percent premium to the company’s closing price on Tuesday.
Its purchase will further bulk up Goldman’s consumer banking unit Marcus, named after one of the bank’s founders and a key plank of Chief Executive David Solomon’s plan to reduce Goldman’s reliance on volatile trading and investment banking revenues.
“We have been clear in our aspiration for Marcus to become the consumer banking platform of the future, and the acquisition of GreenSky advances this goal,” Solomon said in a statement.
Solomon has aimed to build businesses with predictable revenues such as consumer banking and mass-market wealth management, which most of Goldman Sach’s main rivals now have.
Reuters reported earlier this year that Goldman was considering acquisitions to build out Marcus after the Wall Street firm reported slow loan and deposit growth at the business last year in the wake of the COVID-19 pandemic.
GreenSky connects banks with customers seeking financing via an app.
The deal, which has been approved by the boards of both companies and includes a tax adjustment of $446 million, is expected to close in the fourth quarter of 2021 or first quarter next year.

Apple’s new iPhone 13 touts faster 5G, sharper cameras to spur trade-ins

Updated 15 September 2021

Apple’s new iPhone 13 touts faster 5G, sharper cameras to spur trade-ins

  • Analysts expect customers hanging onto older models like the iPhone X will be eager to upgrade

Apple Inc. unveiled the iPhone 13 and a new iPad mini on Tuesday, expanding 5G connectivity and showing off faster chips and sharper cameras without raising the phone’s price.
The Cupertino, California-based company did not announce any blockbuster features or products, but analysts expect customers hanging onto older models like the iPhone X will be eager to upgrade. To encourage trade-ins, participating wireless carriers are offering incentives ahead of the year-end holiday season that to make the new phones free to some customers.
The iPhone 13 will have a new chip called the A15 Bionic that enables features like automatically translating text. The phone also has a better display, longer battery life and a Cinematic mode for automatically changing focus while taking videos. Apple said the iPhone 13 will have custom 5G antennas and radio components for faster speeds and will come in five colors.
The phone will start at $699, and participating wireless carriers will offer up to $700 off for qualifying trade-ins. The iPhone 13 Pro starts at $999 and the Pro Max starts at $1,099, with trade-in offers of up to $1,000. All three models will be available Sept. 24.
The prices are unchanged from last year, but some carriers such as AT&T Inc. will offer the devices for no additional charge with subsidies of up to $1,000 if customers trade in a previous model and sign up for an installment plan.
Verizon Communications Inc. and T-Mobile US Inc. offered similar deals but with slightly lower subsidies up to $700. The biggest subsidies will go to customers who turn in iPhone 11 and iPhone 12 models.
Ben Bajarin, head of consumer technologies at Creative Strategies, said he expects those aggressive subsides will increase as Apple and carriers try to hold onto customers.
“That offer is unique to Apple, and it’s a strength they have to keep these sales cycles going for them and for the carriers,” Bajarin said.
The iPhone is Apple’s most important product, but Apple has rolled out a web of service and other products that are seen as locking customers into a system they enjoy — and would find expensive to leave.
The Series 7 smart watch will feature a larger display and faster charging. It will start at $399 and be available later this autumn.
The company also updated its iPad Mini with 5G connectivity and a reworked design that makes it look like the higher-end iPad Air and Pro models. Bob O’Donnell, head of TECHnalysis Research, said the small tablet was Apple’s most surprising announcement and could lure in customers who want a device with 5G that can handle more powerful apps than a phone.
“I don’t think it replaces any other device, like we’ve seen Apple try to position some of the bigger iPads as PC replacements,” O’Donnell said.
The new iPad Mini’s price rose by $100, but it also added new capabilities like compatibility with the company’s Apple Pencil and a faster chip than the larger-screened base model iPad, bucking a trend of smaller screens being cheaper. Apple showed the Mini in use by professionals like doctors.
Apple also updated its base-model iPad with a new camera. The new iPad will start at $329 and the Mini at $499. Both will be available next week.
Apple shares closed down about 1 percent, a sharper fall than a slight downturn in broader markets.
“It seems like there’s nothing really revolutionary announced, but of course, as usual, they announced enough improvements to at least generate some enthusiasm among consumers,” said Rick Meckler, partner at family investment office Cherry Lane Investments.
Apple’s biggest product launch of the year comes as some of the shine has come off its stock as business practices such as charging software developers commissions on in-app payments have come under regulatory scrutiny.
Apple shares were up about 11.6 percent year to date as of Tuesday’s close, trailing the Nasdaq Composite Index, which was up 16.7 percent over the same period.
Kim Forrest, founder and chief investment officer at Bokeh Capital, said she was not concerned by the lack of splashy, unexpected products, since Apple’s upgrades would keep customers. “I think the consumer, once it gets the Apple chip in its head, it’s very hard to dislodge,” she said.
The Apple Watch has become a cornerstone of its $30.6 billion accessories segment, which was up 25 percent in Apple’s most recent fiscal year even as its iPhone revenue declined slightly. Analysts widely believe that Apple users who buy more than one product — such as an Apple Watch and iPhone — are more likely to stick with the brand and spend on the company’s apps and services.
Apple focused on fitness features such as improving how the watch tracks bicycling workouts and dust protection for hiking. The watch is paired tightly with Apple Fitness+, a paid service offering guided workouts with Apple instructors. The company added pilates, skiing-oriented workouts and group workouts.
Shares of exercise bike and online training company Peloton were down about 1.6 percent.


Lebanon to receive $1.135bn in SDRs from IMF

Updated 13 September 2021

Lebanon to receive $1.135bn in SDRs from IMF

  • Lebanon is in the throes of a deep financial crisis that has propelled three quarters of its population into poverty

BEIRUT: Lebanon’s finance ministry said on Monday the central bank would receive $1.135 billion on Sept. 16 in International Monetary Fund Special Drawing Rights (SDRs), much needed funds as the country struggles with one of the deepest depressions in modern history.
The new allocation of the IMF’s reserve currency is comprised of $860 million from 2021 and $275 million from 2009, a statement by the ministry said.
Lebanon is in the throes of a deep financial crisis that has propelled three quarters of its population into poverty. Its central bank has all but run down its reserves.
The depletion of foreign currency has translated into worsening shortages of basic goods such as fuel and medication in the past couple of months.
After a year of political deadlock, Lebanese leaders finally agreed a new government on Friday opening the way to a resumption of talks with the IMF.


ADNOC Drilling IPO price implies equity valuation of $10bn

Updated 13 September 2021

ADNOC Drilling IPO price implies equity valuation of $10bn

DUBAI: State oil giant Abu Dhabi National Oil Co. (ADNOC) has set a price for the initial public offering of its drilling unit, giving ADNOC Drilling an equity valuation of $10 billion, it said on Monday.
ADNOC will sell a minimum 7.5 percent stake in the IPO of ADNOC Drilling at 2.3 dirhams ($0.6262) per share, raising at least $750 million in the deal.
The sale is the second public flotation of a company owned by the Abu Dhabi oil major after the 2017 listing of ADNOC Distribution, the largest operator of petrol stations and convenience stores in the United Arab Emirates.
ADNOC will sell a minimum 1.2 billion shares in the IPO, according to the prospectus, but it reserved the right to increase the size of the offering at any time before the end of the subscription period.
The equity valuation is similar to that in 2018 when ADNOC sold a 5 percent stake in ADNOC Drilling to Baker Hughes.
The planned IPO is the latest move by Gulf oil giants ADNOC and Saudi Aramco to raise cash from outside investors as they try to diversify sources of income in their oil-dependent economies. Saudi Aramco listed in late 2019, raising $29.4 billion in the world’s biggest IPO.
The offer price was determined by ADNOC and ADNOC Drilling, following strong initial demand indications from both local and international investors, ADNOC said.
The subscription period opens on Sunday and will close on Sept. 23 for UAE retail investors and on Sept. 26 for qualified domestic and international institutional investors.
ADNOC Drilling is expected to list on the Abu Dhabi Securities Exchange (ADX) on or around Oct. 3, it said.

ACWA Power won’t start other hydrogen projects before NEOM venture advanced: CEO

Updated 12 September 2021

ACWA Power won’t start other hydrogen projects before NEOM venture advanced: CEO

  • “For us it’s about making sure we deliver the first project to give us the confidence and then the capabilities and capacity to then start replicating it,” CEO says

RIYADH: ACWA Power, the energy producer backed by Saudi Arabia’s sovereign wealth fund, sees big opportunities in the hydrogen market but the company isn’t planning to add another hydrogen project to its portfolio for some time until its venture with NEOM and Air Products is at an advanced level, its CEO said.

“The world is projecting a massive green hydrogen market ahead of us, so the market is there for us – we don’t need to worry about the market,” Paddy Padmanathan said in an interview with Arab News last week.

“For us it’s about making sure we deliver the first project to give us the confidence and then the capabilities and capacity to then start replicating it,” he said.

Air Products, in conjunction with ACWA Power and NEOM, signed an agreement last year for a $5 billion venture to produce 650 tons per day of green hydrogen by heating water using renewable energy, as well as 1.2 million tons per year of green ammonia for exporting the hydrogen to the global market. The project, which will be built in NEOM, is scheduled to be onstream in 2025.

“There is a lot of work that is going on by the three partners in order to prepare the site, get on with the engineering, and develop the design. Because it’s the first project of its kind we really want to spend the time to optimize it,” he said.

The venture has already appointed advisers, including Lazard, for the financial planning, and there are numerous other technical advisers, Padamanthan said.

Lazard, which advised Saudi oil giant Aramco on its initial public offering in 2019, approached banks early this year to sound out their appetite for the project, Reuters previously reported, citing sources familiar with the matter.

Acwa Power went into the hydrogen project at NEOM for three main reasons, said Padamanthan. First, its ability to reduce the cost of energy used in the project. Second, the advantage it gets from selling power on a long-term basis, and finally, its expertise in building complex projects from scratch.

"Over 60 percent plus or minus of the cost of producing green hydrogen using electrolysis is the cost of electricity, so... we have learned how to deliver competitive renewable energy, both solar and wind," he added.

Securing long-term offtake contracts for its power is a core principle in Acwa's business model, something it will keep in its NEOM's project. "So as we go forward with the hydrogen venture we are looking for that long offtake contract," he said. 

ACWA, an equal partner with NEOM and Air Products, will focus on the production of energy to feed it into the electrolyze to produce hydrogen, while Air Products will handle the production of hydrogen and convert it to liquid ammonia ready for customers at loading points. Through this strategy, ACWA is transferring the market risk to Air Products, he added. Market risk is therefore transferred from ACWA to Air Products.

Despite all this interest in hydrogen, ACWA's CEO thinks hydrogen still needs time to become a major source of energy on a global scale.

"Let's not overplay hydrogen. The fact of the matter is that hydrogen is in its early days," he said. 

Hydrogen can lower the emissions from the industrial sector which is responsible for roughly 40 percent of all global emissions, but this can happen if we can make hydrogen cost competitive, and "then if we can find storage solutions. The world needs to develop that for hydrogen, and then transportation solutions," he said, adding that there is loss of efficiency when transporting hydrogen, which requires shipping it in the form of ammonia to the final user.