Acwa Power signs hydrogen purchase agreement with Uzbek chemical company

The Saudi utility has been an active investor in Uzbekistan's energy industry

An Acwa Power wind turbine in Morocco. The Saudi company is developing projects in the kingdom and abroad. Reuters

Saudi Arabia's private utility Acwa Power has signed a hydrogen purchase agreement with Uzbek state-owned chemical company Uzkemyoasat.

Acwa Power, which is developing a green hydrogen plant and a green ammonia pilot project in the Central Asian country, also signed a power purchase agreement with Uzbekistan's national power grid.

The hydrogen offtake capacity is 3,000 tonnes a year, while the renewable capacity ranges from 52 megawatts to 100 megawatts, the company said on Thursday in a statement to the Tadawul stock exchange, where its shares are traded.

The contract value of both projects is $100 million and they are expected to have a financial effect once commercial operations start in June 2024 and June 2025, Acwa Power said, without providing further details.

Acwa Power has been an active investor in Uzbekistan's energy industry as it continues to expand its global portfolio.

In March, the comoany signed an agreement to develop two solar plants in Uzbekistan with a total generation capacity of 1.4 gigawatts.

Last year, it signed agreements worth $12 billion to develop three new energy projects in Uzbekistan, including developing the largest single onshore wind project in the world in the Karakalpakstan region, with a total capacity of 1.5 gigawatts.

An additional $10 billion investment co-operation agreement was also signed to jointly develop gas-to-power, renewable energy and green hydrogen projects in Uzbekistan.

Uzbekistan is working to improve its energy and power generation sectors, harnessing its natural resources and seeking investments from overseas.

In 2019, the Central Asian nation embarked on a multiphase transition from a state-owned and subsidised energy sector to a competitive gas, oil and electricity market with significant private sector participation.

The move is expected to provide huge economic benefits, according to the International Energy Agency.

Uzbekistan has also unveiled plans to raise the share of renewable energy in total electricity supply to 25 per cent by 2030, from 10 per cent in 2020.

Acwa Power, which is developing a $5 billion green hydrogen-based ammonia production plant in Saudi Arabia’s smart city Neom, plans to "replicate" the project elsewhere, Andrea Lovato, global head of hydrogen at Acwa Power, told The National in February.

The green hydrogen project at Neom will use four gigawatts of renewable power from solar, wind and storage to produce 650 tonnes a day of hydrogen from electrolysis, using technology supplied by German company Thyssenkrupp, the companies said at the time.

The project, expected to come on stream in 2025, will produce about 1.2 million tonnes of green ammonia a year.