Green Hydrogen Plant In Saudi Desert Aims To Amp Up Clean Power
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Green Hydrogen Plant In Saudi Desert Aims To Amp Up Clean Power

Developers behind the world’s largest planned green hydrogen project hope a growing global thirst for emission-free fuels will pay dividends.

By Christopher M. Matthews & Katherine Blunt
Mon, Mar 1, 2021 1:17amGrey Clock 6 min

Can a multibillion-dollar project in the Saudi desert jump-start the demand for green hydrogen, an elusive energy source that could help eliminate carbon emissions from vehicles, power plants and heavy industry?

The allure of hydrogen is undeniable. Unlike oil and natural gas, it doesn’t emit carbon dioxide and other greenhouse gases when burned. It’s more easily stored than electricity generated by wind turbines and solar farms, and it can be transported by ship or pipeline. Green hydrogen, which is produced using renewable energy sources, is especially attractive as a fuel. It’s made from water rather than methane or other hydrocarbons.

But those who foresee a green hydrogen future face a quandary: The high cost of producing the odourless, colourless, flammable gas can be mitigated only by large-scale projects, which in turn make economic sense only if there is a widespread market for green hydrogen. That doesn’t yet exist.

In Neom, a planned megacity of the future now taking shape in northwestern Saudi Arabia, the investors behind the green hydrogen project think they can deliver the chicken and the egg.

The initiative—a joint venture of Neom, U.S. chemical company Air Products & Chemicals Inc., and Saudi Arabia’s ACWA Power—will invest $5 billion to build what will be the world’s largest green hydrogen production facility. Another $2 billion will be invested in distribution infrastructure in consumer markets around the world, primarily to fuel industrial vehicles and public buses.

Plans call for the sprawling facility, which isn’t yet under construction, to produce 650 tons of green hydrogen a day starting in 2025. The facility’s output will dwarf that of a green hydrogen plant in Québec that produces about nine tons a day, making it the largest such facility in the world. The Neom project exemplifies the Kingdom’s ambitious plan to diversify away from oil and natural gas and showcase Neom as a global hub for technology and green energy.

One of Neom’s main advantages in what could become a global race to develop green hydrogen is that the city’s location along the Red Sea possesses world-class solar and wind power, according to Peter Terium, head of Neom’s energy sector. Solar will power the plant during the day, wind at night, he says.

It isn’t easy to find a site with strong enough wind and sun, as well as proximity to a port, Mr. Terium says. “Otherwise, we wouldn’t be the first to announce an investment of this size,” he says.

Other countries are following suit. Australia, for example, has expedited the approval of a $36 billion project in the Outback in the western part of the country that will generate 26,000 megawatts of renewable electricity to be used to power the green hydrogen production.

Most hydrogen made for commercial use is so-called grey hydrogen, which is produced by splitting the hydrocarbon molecules in coal or natural gas. This process emits carbon. Green hydrogen, on the other hand, emits no carbon because it relies upon a process called electrolysis, in which electricity is used to strip hydrogen atoms from water molecules.

Air Products is the world’s largest producer of hydrogen, most of which now is derived from fossil fuels. But through its involvement with Neom, the Allentown, Pa.-based corporation is betting big that many countries will pay a premium for green hydrogen to meet carbon reduction targets, according to chief executive Seifi Ghasemi.

The Neom project aims to produce enough hydrogen to fuel about 20,000 buses a day. But rather than being piped or shipped to end users as gaseous or liquid hydrogen, the hydrogen will first be converted into ammonia, which is denser and therefore more economical to ship. After being sent by boat to Asia, the U.S. and Europe, the ammonia will be converted back into hydrogen before being sent to filling stations built by Air Products.

“The only thing [the customer] has to do is buy fuel cell vehicles to use the hydrogen,” Mr. Ghasemi says. “Hydrogen will become, 30 years from now, like oil is today.”

It’s a bold prediction that would require significant changes to the way we use fuel and electric power. Not all experts see that happening because of the sheer cost and magnitude of redesigning energy infrastructure around the world. That would require changing everything from vehicles to household applications.

Such a world would look markedly different. Filling stations would dispense hydrogen instead of gasoline. Hydrogen could be piped into homes to feed heaters and gas stoves. And unlike wind or solar, it could provide a steady supply of electricity for large power users, such as data centres and manufacturing hubs, when the wind doesn’t blow and the sun doesn’t shine.

If it can be scaled, green hydrogen could also help solve several big challenges in a lower-carbon economy: powering heavy-duty trucks and ships without reliance on giant batteries, providing round-the-clock electricity to supplement intermittent supplies from wind and solar and decarbonizing heavy industrial processes including steel and concrete manufacturing.

Julio Friedmann, a senior research scholar at Columbia University, says green hydrogen’s diverse applications could help it become the “Swiss Army knife” of the green energy economy, as states and countries pledge to reach net-zero carbon emissions in the coming decades.

Among energy nerds, hydrogen has long been the butt of a joke: It’s the fuel of the future, and probably always will be. The most abundant element in the universe, hydrogen has seen rounds of hype before, most recently in the early 2000s, when it was promoted as a transportation fuel amid fears about declining reserves of fossil fuels.

Some investors remain deeply sceptical of hydrogen, citing its high cost and the inevitable challenges of building infrastructure necessary to deploy it at scale. Kerrisdale Capital, a New York-based investment firm, is shorting shares in a fuel-cell maker whose share price has skyrocketed this year alongside other fuel-cell and alternative-energy stocks in the hope that the companies will be big players in a “hydrogen economy.” Fuel cells use chemical reactions to produce electricity from hydrogen and oxygen.

“The ‘hydrogen economy’ will never happen,” the firm wrote in a research note. “Hydrogen energy will have only very niche use cases.”

Increased regulation of greenhouse gases, growing investor pressure on companies to reduce carbon emissions and technological advances have many thinking the hydrogen hype is real this time. Management consulting firm McKinsey & Co. estimates that hydrogen could account for 14% of power used in the U.S. by 2050, from next to nothing today.

Another factor in the heightened interest in green hydrogen is the steep decline in the price of renewable energy, which Mr. Friedmann says now accounts for 50% to 70% of the cost of green hydrogen. The cost of building wind and solar farms has fallen in recent years as technology costs have declined and more projects are built at scale. Wind and solar now rival natural gas as the lowest-cost means of power generation.

“You are going to see a lot of countries and states going after hydrogen,” Mr. Friedmann says.

Along with the Neom partners, other investors big and small are betting that green hydrogen is finally positioned to realize its full potential. Global expenditures on hydrogen projects are projected to top $400 billion between now and 2030, followed by more than $2 trillion in spending from 2030 to 2050, investment bank Evercore ISI estimates.

Some auto makers, including Toyota Motor Corp. and Honda Motor Co., are developing vehicles with hydrogen fuel cells, which convert the fuel into electricity.

Several major utility companies, meanwhile, are looking into running power plants on hydrogen instead of natural gas, which is now the nation’s primary fuel for electricity generation. Unlike wind and solar farms, gas plants can run all the time, or fire up quickly to meet peak demand.

The Los Angeles Department of Water and Power, the nation’s largest municipal utility, is spearheading a $1.9-billion effort to convert a coal-fired power plant in Utah to run on natural gas and hydrogen produced with wind and solar power.

In northwestern New Mexico, developers are planning to spend up to $2 billion on a hydrogen-fueled power plant to serve electricity customers throughout the West starting in 2024. The Libertad Power Project, as the plant initiative is known, will use so-called blue hydrogen, which is produced by carbon-capture technology, before transitioning to green hydrogen as it becomes cheaper and more widely available. Carbon capture involves catching the carbon atoms upon production and storing them so they can’t enter the atmosphere.

For all its promise, green hydrogen faces many hurdles. These include the intermittence of solar and wind power and the high cost of electrolyzers, complex systems that traditionally have required large capital investments but which are now falling in price. Despite declines in the cost of renewable energy, green hydrogen production plants will need high utilisation rates, or almost round-the-clock power, to make them profitable.

Hydrogen is hard to store in gaseous form and is expensive to liquefy, which is why the Neom project plans to convert it to ammonia for transport. It can also weaken metal on contact, making it difficult to transport via pipeline unless it is blended with natural gas or other substances.

Columbia’s Mr. Friedmann says the barriers to widespread use of green hydrogen are related not to technology but to infrastructure. Governments and companies will need to invest heavily in power grids, ports, pipelines and fueling stations that can accommodate hydrogen. The costs of doing that will be borne across the global economy if governments implement sound public policy to drive market investment, he says.



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A Killer Golf Swing Is a Hot Job Skill Now

Companies are eager to hire strong players who use hybrid work schedules to schmooze clients on the course

By CALLUM BORCHERS
Fri, Jun 14, 2024 5 min

Standout golfers who aren’t quite PGA Tour material now have somewhere else to play professionally: Corporate America.

People who can smash 300-yard drives and sink birdie putts are sought-after hires in finance, consulting, sales and other industries, recruiters say. In the hybrid work era, the business golf outing is back in a big way.

Executive recruiter Shawn Cole says he gets so many requests to find ace golfers that he records candidates’ handicaps, an index based on average number of strokes over par, in the information packets he submits to clients. Golf alone can’t get you a plum job, he says—but not playing could cost you one.

“I know a guy that literally flies around the world in a private jet loaded with French wine, and he golfs and lands hundred-million-dollar deals,” Cole says.

Tee times and networking sessions have long gone hand-in-golf-glove. Despite criticism that doing business on the course undermines diversity, equity and inclusion efforts—and the fact that golf clubs haven’t always been open to women and minorities —people who mix golf and work say the outings are one of the last reprieves from 30-minute calendar blocks

Stars like Tiger Woods and Michelle Wie West helped expand participation in the sport. Still, just 22% of golfers are nonwhite and 26% are women, according to the National Golf Foundation.

To lure more people, clubs have relaxed rules against mobile-phone use on the course, embracing white-collar professionals who want to entertain clients on the links without disconnecting from the office. It’s no longer taboo to check email from your cart or take a quick call at the halfway turn.

With so much other business conducted virtually, shaking hands on the green and schmoozing over clubhouse beers is now seen as making an extra effort, not slacking off.

Americans played a record 531 million rounds last year. Weekday play has nearly doubled since 2019, with much of the action during business hours , according to research by Stanford University economist Nicholas Bloom .

“It would’ve been scandalous in 2019 to be having multiple meetings a week on the golf course,” Bloom says. “In 2024, if you’re producing results, no one’s going to see anything wrong with it.”

A financial adviser at a major Wall Street bank who competes on the amateur circuit told me he completes 90% of his tasks by 10 a.m. because he manages long-term investment plans that change infrequently. The rest of his workday often involves golfing with clients and prospects. He’s a member of a private club with a multiyear waiting list, and people jump at the chance to join him on a course they normally can’t access.

There is an art to bringing in business this way. He never initiates shoptalk, telling his playing partners the round is about having fun and getting to know each other. They can’t resist asking about investment strategies by the back nine, he says.

Work hard, play hard

Matt Parziale golfed professionally on minor-league tours for several years, but when his dream of making the big time ended, he had to get a regular job. He became a firefighter, like his dad.

A few years later he won one of the biggest amateur tournaments in the country, earning spots in the 2018 Masters and U.S. Open, where he tied for first among non-pros.

The brush with celebrity brought introductions to business types that Parziale, 35 years old, says he wouldn’t have met otherwise. One connection led to a job with a large insurance broker. In 2022 he jumped to Deland, Gibson Insurance Associates in Wellesley, Mass., which recognised his golf game as a tool to help win large accounts.

He rescheduled our interview because he was hosting clients at a private club on Cape Cod, and squeezed me in the next morning, before teeing off with a business group in Newport, R.I.

A short time ago, Parziale couldn’t imagine making a living this way. Now he’s the norm in elite amateur golf circles.

“I look around at the guys at the events I play, and they all have these jobs ,” he says.

His boss, Chief Executive Chip Gibson, says Parziale is good at bringing in business because he puts as much effort into building relationships as honing his game. A golf outing is merely an opportunity to build trust that can eventually lead to a deal, and it’s a misconception that people who golf during work hours don’t work hard, he says.

Barry Allison’s single-digit handicap is an asset in his role as a management consultant at Accenture , where he specialises in travel and hospitality. He splits time between Washington, D.C., and The Villages, Fla., a golf mecca that boasts more than 50 courses.

It can be hard to get to know people in distributed work environments, he says. Go golfing and you’ll learn a lot about someone’s temperament—especially after a bad shot.

“If you see a guy snap a club over his knee, you don’t know what he’s going to snap next,” Allison says.

Special access

On a recent afternoon I was a lunch guest at Brae Burn Country Club, a private enclave outside Boston that was the site of U.S. Golf Association championships won by legends like Walter Hagen and Bobby Jones. I parked in the second lot because the first one was full—on a Wednesday.

My host was Cullen Onstott, managing director of the Onstott Group executive search firm and a former collegiate golfer at Fairfield University. He explained one reason companies prize excellent golfers is they can put well-practiced swings on autopilot and devote most of their attention to chitchat.

It’s hard to talk with potential customers about their needs and interests when you’re hunting for errant shots in the woods. It’s also challenging if you show off.

The first hole at Brae Burn is a 318-yard par 4 that slopes down, enabling big hitters like Onstott to reach the putting green in a single stroke. But to stay close to his playing partners and keep the conversation flowing, he sometimes hits a shorter shot.

Having an “in” at an exclusive club can make you a catch. Bo Burch, an executive recruiter in North Carolina, says clubs in his region tend to attract members according to their business sectors. One might be chock-full of real-estate investors while another has potential buyers of industrial manufacturing equipment.

Burch looks for candidates who are members of clubs that align with his clients’ industries, though he stresses that business acumen comes first when filling positions.

Tami McQueen, a former Division I tennis player and current chief marketing officer at Atlanta investment firm BIP Capital, signed up for private golf lessons this year. She had noticed colleagues were wearing polos with course logos and bringing their clubs to work. She wanted in.

McQueen joined business associates on the golf course for the first time in March at the PGA National Resort in Palm Beach Gardens, Fla. She has lowered her handicap to a respectable 26 and says her new skill lends a professional edge.

“To be able to say, ‘I can play with you and we can have those business meetings on the course’ definitely opens a lot more doors,” she says.

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11 ACRES ROAD, KELLYVILLE, NSW

This stylish family home combines a classic palette and finishes with a flexible floorplan

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Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.

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