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8 March 2023

Kazakhstan and India gearing up wind, thinking of hydrogen

As the race for sub $1.5/kg green hydrogen price is well underway, Kazakhstan and India are both making the news this week with individual giga-scale wind farm deals as the Asian countries are churning the wheels on their respective hydrogen industries.

ACWA Power, a Saudi developer and investor, has announced a partnership agreement with the Republic of Kazakhstan’s Ministry of Energy and Samruk-Kazyna, the sovereign wealth fund of Kazakhstan, to lead and develop a 1GW wind and battery storage project within the Central Asian country. The project marks ACWA Power’s entry into Kazakhstan, and with an initial investment of $1.5 billion, it aims to support national climate action, renewables integration, and sustainable development efforts through innovation and technology integration. The investment is part of a bigger push intended to successfully decarbonise fossil fuel-based power generation in Kazakhstan. The project is due for completion in 2027, according to ACWA.

Kazakhstan has a 2050 strategy which aims at placing the nation among the top 30 global economies. How will it achieve this? With the help of hydrogen. More specifically, hydrogen exports from a 30 GW electrolysis plant powered by 45 GW of combined wind and solar. Back in 2021, German developer Svevind Energy had announced a memorandum of understanding with Kazakh Invest to develop the world’s largest proposed green hydrogen production plant. Wanting to take advantage of the wind speeds and solar irradiance present in the vast empty desert areas of the country, the company set out to complete this project, in phases, by 2040.

Kazakhstan’s other 2050 target is less glamorous. The nation aims to supply only half of its energy from renewables source by then. This is somewhat problematic because if, for instance, steel manufacturers would be interested in setting up factories close to a green hydrogen production plant, they would also have to be guaranteed a supply of clean renewable electricity otherwise the crude steel produced might be susceptible to things like the European carbon border tax. Having a mixed ideology about how your nation is run by 2050 is not something very marketable these days – something that China and India should also be afraid of and perhaps are coming to terms with.

Speaking of which, a bit south of Kazakhstan, Indian developer Viviid Renewables has announced a partnership with Copenhagen Infrastructure Partners (CIP) to develop a wind farm of at least 1.8GW capacity. The first phase of the farm will amount to just 500MW though.

As Indian Prime Minister Modi recently came out to publicly announce that his nation will base its entire economy on hydrogen production and export, any new wind related deals will be more than welcomed. With a production target of 5 million tons of green hydrogen and a potential for 10, India is still taking its time with decarbonization. Having a 2070 net-zero target, India has allowed itself the luxury of time in this instance, but as mentioned above, it might come back to bite it due to the west shamelessly pointing fingers and introducing all sorts of taxes on imports from such territories with CO2 emissions.

Both countries are regarded as favourites to breach the $2/kg price of green hydrogen by making use of vast desert areas and high values of solar irradiance and wind speeds, but a struggling wind sector coupled with an infant and relatively risky hydrogen industry places a lot of strain on the solar market which will soon be tasked with trying to accommodate both clean electricity generation for general use and green hydrogen production.