Saudi Arabian energy company ACWA Power will develop the largest green hydrogen plant in Indonesia, which will be powered by 600MW of new solar and wind capacity.
While hydrogen has long been touted as a potential fuel source amid the energy transition, its production can be environmentally damaging, with the production of so-called grey and blue hydrogen reliant on the use of natural gas. Green hydrogen, which is produced by renewable power sources, meanwhile, has no such environmental damage, and ACWA Power has already invested into the sector, signing a green hydrogen production memorandum of understanding in Thailand last year.
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The company’s latest investment into a facility of this nature also brings the potential for new solar capacity installations in Indonesia. The facility, known as the Garuda Hidrogen Hijau project, will produce 150,000 tonnes of green ammonia per year.
ACWA Power announced the deal on the sidelines of the COP28 climate conference in Dubai, and plans to invest US$1 billion into the project. It will develop the project alongside two state-owned entities, PT Perusahaan Listrik Negara (PLN), an Indonesian electricity provider and PT Pupuk Indonesia, a fertiliser and chemical producer.
“We see a strong commitment from the government, PLN, Pupuk Indonesia and ACWA Power, therefore we are ready to support this joint development effort of green hydrogen and green ammonia to achieve common goals,” said Darmawan Prasodjo, president, director and CEO of PLN.
The firm also plans to open bids for engineering, procurement and construction (EPC) work at the facility in the first quarter of 2024, ahead of reaching financial close at the project by the end of 2025 and reaching commercial operation in 2026.
While the company did not announce how much of the new power generation capacity would be split between wind and solar, ACWA Power has already invested considerably in the Indonesian solar sector. Last year, the company announced plans to build 110MWac of floating PV in the country, and in November, the Indonesian government launched a US$20 billion initiative to fund new renewable power generation in the country.
Next year, our publisher Solar Media will host two hydrogen-based events: Green Hydrogen USA in February and Green Hydrogen EU in April. You can find out more about both of these events on their respective sites.
