Frank WoutersWorley - VP HydrogenChair MENA Hydrogen AllianceChair Dii Advisory BoardNovember 2020

Clean hydrogen economy – a snapshot

1. Energy, the big picture

2. Hydrogen in the Energy Transition

3. The European Hydrogen Strategy and the 2 x 40 GW Electrolyser Initiative

4. Hydrogen as an export product

5. The hydrogen economy in North Africa and the Middle East

6. Hydrogen in Jordan

Flow

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Energy, the big picture

1

4

But also wind is cheap now

Worldwide energy demand: 155,000 TWh/a

6

With solar panels only, it would require a surface area covering about 10% of Australia or 8% of the Sahara Desert.

In a scenario with only wind turbines, it would require an area of 1.5% of the Pacific Ocean.

Hydrogen in the Energy Transition

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The role of hydrogen in the energy transition

8Enable the renewable energy system Decarbonize end uses

Source: Hydrogen Council

Hydrogen as an enabler of variable low-cost electricity

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At increasing rates of variable renewable energy, demand for hydrogen grows exponentially

How do we make hydrogen?

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▪ Steam methane reforming of natural gas

▪ 95% of all current H2 production▪ 9-10 kg of CO2 emissions for each

kg of H2

▪ SMR: TRL 9

▪ Not yet practiced, but significant attention lately

▪ CC(U)S: TRL 8

▪ Water electrolysis is a derivative of proven chlorine electrolysis, with decades of experience

SMR: grey hydrogen SMR + CC(U)S: blue hydrogen Electrolysis: green hydrogen

Power to Gas: Electrolyzer

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Electrolysis: not new

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Source: NEL

Hydrogen will soon be competitive with natural gas.

▪ IEA (June 2019)$1/kg by 2040, which corresponds to $9/mmbtu for natural gas.

▪ Bloomberg (August 2019)Production cost of hydrogen to go down to $0.8/kg, which corresponds to $6/mmbtu for natural gas.

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With the declining cost of electrolyzers and renewable electricity, hydrogen will be competitive with natural gas.

How to make hydrogen fuels?

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Ammonia

Hydrogen

Jet fuel

Zero carbon

The European Hydrogen Strategy and the 2 x 40 GW Electrolyser Initiative

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Germany 2020

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Electrons513 TWh

Molecules1986 TWh

RE Power207 TWh

Inter alia Biofuels 185 TWh

Germany 2050

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Electrons513 TWh

Molecules1986 TWh

RE Power100%

• Biofuels (limited)• CCS (limited) • H2

• H2 based substances• Ammonia• Methanol• E-fuels

• Initiative by Hydrogen Europe and several other organisations to have 2x40GW electrolysers installed by 2030:- 40GW in Europe- 40GW in Ukraine and North Africa

• Aim is to make hydrogen competitive: 1.5 - 2.0 €/kg by 2025 1.0 - 1.5 €/kg by 2030

• Other benefits include:• Technology leadership• 82 Mton CO2 emission reduction• Creation of up to 170,000 jobs

• In North Africa and Ukraine, 7.5GW could be domestic (ammonia), and 32.5GW for export, covering 17% of EU’s hydrogen market in 2030

2 x 40 GW Electrolyzer Initative

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European Hydrogen Strategy –8 July 2020

• Priority focus on green hydrogen, role for blue

• At least 6 GW of electrolysers by 2024at least 40 GW installed by 2030.

• Role for import from neighboring regions

• By 2030, the Commission estimates that €13-15bn could be invested in electrolysers across the EU, in addition to €50-150bn for a dedicated wind and solar capacity of 50-75GW.

Hydrogen as an export product

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Hydrogen export pathways

H2 Production Facility

NH3

Synthesis

Truck loading Truck offloading

Marine

loadingMarine terminal

H2

Liquefaction

Marine

loadingMarine terminal

Container

loadingContainer unloading

Production Facility (and port facility) In-Transit Destination Customer Site

Compression

Liquid NH3

Gaseous

H2

Liquid H2

Liquid hydrogen

export

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Cable versus pipeline

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Cable (BritNed) Pipeline (BBL)

Capacity 1 GW 15 GW

Construction Cost € 500 mln € 500 mln

Volume (year) 8 TWh 120 TWh

• 2 pipelines of 48 inch each, with similar capacity as the Nordstream(66 GW)

• 300 TWh or 7.6 million ton hydrogen per year can be transported, which is equivalent to more than 10% of all currently manufactured hydrogen globally.

• At $1.5/kg, this represents potential revenue of $11.4 billion per year

Connecting the gas grid

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Conversion of Infrastructure

• Issue: • Can we use the existing gas grid for hydrogen?

• Considerations:• Certain materials can become brittle, fitness of

compressors, flow meters, etc.

• Magic:• Research in France1, Germany and the Netherlands2 has

shown that the bulk of pipelines can accommodate hydrogen

• Build pure hydrogen infrastructure immediately, develop a conversion plan for 2030 - 2050

• Transition to pure hydrogen only by 20501. www.grtgaz.com/fileadmin/plaquettes/en/2019/Technical-economic-conditions-for-injecting-hydrogen-into-natural-gas-networks-report2019.pdf2. DNVGL. (2017). Verkenning waterstofinfrastructuur (in Dutch). Report for Ministery of Economic Affairs.

Energy Trade

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Hydrogen Import/Export: Costs

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Costs of different hydrogen types by location, USD per kg of hydrogen [IEA 2019]

Regions with large potential H2 demand are renewables-constrained; regions with high renewable energy potential have an advantage to produce cheaply at scale

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Major H2 offtake demand centers and regions with high potential for green H2 production

Favorable RES region Large H2 demand center

▪ High wind and hydropotential

▪ Regulatory push

Norway

▪ Favorable PV/wind hybrid conditions

Canada

▪ High existing and new H2 demand applications

▪ Renewables-constrained due to varying load curves and limited space availability

EU

▪ Favorable PV/wind hybrid conditions

Chile

▪ Rising demand, especially in transportation sector(California)

▪ Favorable PV conditions tosupport self-sufficiency

USA

▪ Potential for large-scale PV farms with favorable loadprofiles

Australia

▪ Strategy to scale up H2 consumption▪ Constrained in space and offshore wind

conditions (deep-sea area)

Japan

▪ H2 roadmap to scale upconsumption

▪ Similar constraints as Japan

Korea

▪ High PV/wind hybrid potential

KSA

▪ Large investments in H2 economy

▪ Potential to be self-sufficient

China

▪ Large growth in feedstockdemand

▪ Limited investments in RES infrastructure

India

SOURCE: World Energy Council

The hydrogen economy in North Africa and the Middle East

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Energy in North Africa

• IRENA estimates that North Africa has a feasible potential for renewable energy of almost 120 GW, with 70 GW wind and the rest solar PV and CSP by 2030

• Competitive green hydrogen produced in North Africa can replace fossil fuels, benefitting both importers (Morocco, Tunisia) and exporters (Algeria, Libya)

• North Africa supplies 13% of Europe’s natural gas demand and 10% of oil demand. More than 60% of North Africa’s oil and gas exports are sent to Europe (Eurostatgas)

• New city, the size of Belgium (26,000km2)

• One of three strategic projects of Saudi Agenda 2030

• Saudi’s Public Investment Fund and others have committed $500 billion

• NEOM will be powered by 100% low-cost renewable energy (40 – 60 GW)

• Given the availability of competitive and low-cost renewable energy, NEOM will produce green hydrogen at scale for local and world markets

NEOM

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NEOM – Profiles of the solar and wind resource

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Avg. loadfactors

overthe

day,%

0

40

20

60

80

100

120

00:00 16:0004:00 08:00 12:00 20:00

Combined avg. wind & solar: 72%1

Avg. wind: 41%Avg. solar: 31%

1. Hypothetical, for a wind plant of for instance 500 MW plus a solar PV plant of 500 MW,

and with a load factor calculated against a plant of 500 MW

Source: NEOM

NEOM H2 will target both domestic and international markets

Target segments

Export

NEOM/

KSA

Products

Green H2 Green Fuels

▪ Conversion of green H2

produced in NEOM into green

products for local off-takers and

export

▪ Examples: ammonia, syngas,

green steel, green cement,

glass industry, food processing

industry, synfuels

▪ Export of green H2/Fuels produced

in NEOM to international markets

with CO2 reduction commitments

▪ Replacement of grey H2 (from

SMR or coal gasification)

▪ Use of H2 in NEOM for power

generation, transportation

and energy storage

NEOM H2: Next steps in making it happen*

Deployment of 40-60 MW pilot production plant, starting production by Q4 2022.

(including downstream green Ammonia, green Methanol, green - synthetic fuels)

First scale up phase finalized in 2026 to 2.000+ MW – feasibility in progress

Second scale up phase finalized in 2030 to 4+ GW**

* The green energy and green molecules market evolves daily. We see an ever more growing interest and will adapt our plans accordingly.

** significant upward potential

Worley’s Role:• Strategy support, partner outreach, business case, definition of pilot and scale-up• Owner’s Engineer and Engineering Services

Hydrogen in Jordan

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• Curtailment of renewable energy

• Hydrogen can enable more low-cost solar and wind

• Similar resource potential compared to NEOM, providing high load factors and low cost

• Potential Applications:• Power sector

• Transport sector

• Ammonia production in Aqaba at Nippon Jordan Fertilizer Company

Why Hydrogen in Jordan?