Global power players in finance and respective regional influence are busy positioning their countries in prominent profiles when considering future international energy market dominance. The three key countries are the USA, China and Saudi Arabia, who all exert military, financial and cultural influence over the western, eastern and Arab world.
All three are undertaking work that utilises three separate strategies focusing on the implementation of clean energy dispersal and defining global control over future energy markets.
USA energy supplies and production rate is the highest in the world. America produces the most oil and gas in the world but the requirement to progress away from high carbon fuels under President Biden’s administration, America’s future energy policy is exploring several ways in which to introduce renewables and hydrogen into the domestic energy mix. Renewable deployment will focus on solar, wave and offshore and onshore wind projects.
Japanese investment company, Itochu Corporation will invest in the 160MW Prairie Switch Wind Project in Texas, owned by American infrastructure Investment company - Fengate Asset Management. Commercial operations will commence towards the end of 2023. The onshore wind project will comprise of 48 wind turbines that each generate 3.4MW of power.
Five renewable developers have been named as winners of an auction selling offshore wind space off the coast of California. RWE acquired 63,338 acres of seabed for $157.7 million. Copenhagen Infrastructure Partners bought 69,031 acres for a price of $173.8 million. Equinor won 80,062 acres for $130 million. Central Californian Offshore Wind was allocated 80,418 acres after a bid of $150.3 million was accepted. And finally, Invenergy California Offshore acquired an 80,418 site for $150.3 million.
American industrial gas supplier Air Products and American utilities company AES Corporation will work together in investing $4 billion to construct and operate a green hydrogen production facility in Wilbarger County, Texas. Commercial operations will begin in 2027.
Saudi Arabia is the pre-eminent producer and supplier of fossil fuels and a major source of influence within the Arab world. Saudi Arabia is amongst the world’s leaders in oil production and holding natural gas reserves. The Saudi ruling class is a huge player in global energy and would very much like this to continue.
If energy were to be excluded from Saudi Arabia’s export capacity, current levels of considerable wealth will shrivel noticeably. The Saudis in essence must successfully introduce a separate decarbonising energy source that can be as financially lucrative. Saudi Arabia believe they have identified that energy source - hydrogen.
Acaw Power, a huge pan-national Saudi energy company will construct a $8 billion green hydrogen production facility alongside US company, Air Products, in Saudi Arabia’s $500 billion planned smart city Neom. Neom itself will accept only renewable energy and will be a hub of future energy dispersal.
Acwa has also announced intentions to replicate their Neom project with a further three facilities that will produce hydrogen. Details of where and cost are yet to be released.
Acwa rea also developing a hydrogen production plant alongside Oman’s OQ energy inside Oman’s Salalah Free Zone to the cost of $7Billion and working with South African financial institution, Industrial Development Corporation of South Africa, in producing green hydrogen and other green fuels, in a deal that cost $10Billion. Acwa has also reached a further agreement with South Korean holding company, Posco Holdings, to develop and produce green hydrogen projects in South Korea.
China is also leaning towards future domestic hydrogen dispersal for several reasons. China is entirely reliant on foreign imports for supplies of energy. Without imports China would not be able to function as a cohesive economy. As hydrogen can be manufactured without outside assistance the Chinese government is attracted to easily manufactured sustainable energy supplies.
Chinese state-owned oil and gas giant, Sinopec, is constructing a green hydrogen installation in the north-western region of Xianjiang. The facility is thought to cost around $470 million and will be in operation in June 2023.
There is however, a fully operational green hydrogen facility already operational in the autonomous region of Ningxia, central China. A 200MW electrolyser is powered by solar energy and converted into green hydrogen for industrial purposes. The site is owned and managed by Chinese company Ningxia Baofeng Energy group.
China’s steel producing city, Tangshan – located in the east of Beijing, Hebei Province, will be converted into a huge hydrogen hub. Plans also include converting all residential cooking appliances in to accepting hydrogen and introduce hydrogen powered vehicles on to local roads. Total cost of remodelling the entire city’s energy provision to hydrogen will be around $746 million.
All three economies, Saudi Arabia, China and the USA are aiming to introduce alternative energies into domestic operations soon. Saudi Arabia will benefit from starting an international hydrogen economy as this is the most realistic chance of holding on to a prominent position within the international energy market.
China will benefit from being able to generate a source of sustainable power without importing whilst America holds twin ambitions of decarbonising national fuel supplies and remaining the world leader in energy production and exportation. All three countries are keen to switch fuels and have identified renewables and hydrogen as global future energies and as potential tradable commodities.
Whilst Saudi Arabia, China and USA hope to maintain and build upon respective present status, the amount of regional influence these countries hold could force similar and close proximity nations to adopt an identical methodology of energy cultivation and distribution by enforced financial energy market pressures. The issue of future energy supply will affect the geopolitical manoeuvring of every nation and Saudi Arabia, China and the US will be the three main actors.
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