Saudi renewables developer ACWA Power is partnering with the Thai state on a plan to develop a massive $7bn green hydrogen and ammonia plant in Thailand — the first of this size earmarked for the south east Asian country.

Thai oil company PTT, which is owned by the Thai government, and state-owned power generator Electricity Generating Authority of Thailand (EGAT) signed a memorandum of understanding with ACWA over the weekend, which lays the groundwork for the partners building a renewables-powered green hydrogen facility that will produce 225,000 tonnes per year of green H2.

This would be equivalent to 1.2 million tonnes per year of green ammonia production, ACWA said, without specifying what ratio of hydrogen to ammonia the proposal would yield.

ACWA envisages the project costing $7bn to build, but details on location and timeframe were not forthcoming. ACWA Power had not responded to questions at the time of publication.

The plan is to supply Thailand with green hydrogen for use as a “new alternative energy source”, while also opening up the possibility of green H2 and ammonia exports.

The country has good levels of solar irradiation, around 2.63-3.88 kWh per metre squared, as well as average wind speeds of 6.15 metres per second.

And Thailand’s renewable energy capacity is still relatively underdeveloped, with just 1.5GW and 3.5GW of respective wind and solar capacity installed at the end of 2021, accounting for around 12% of the power mix.

Although the country is targeting net zero by 2065, it is not clear how a green hydrogen supply for use as a “new energy source” can help it tackle this challenge.

There may be a use case in the chemicals industry: the government is already eyeing the utilisation of some green hydrogen to decarbonise its refining sector, from which it already exports oil-derived products. Earlier this year, refiner TOP, which is owned by PTT, bought a stake in US electrolyser start-up Versogen.

But in the energy sector, the use case is murkier. Thailand is currently heavily reliant on fossil gas and coal for its power supply — which means that it will need to invest heavily in renewable energy capacity to decarbonise electricity. It is also dependent on oil for the rest of its primary energy.

One possibility is that Thailand might pursue a hydrogen supply to decarbonise its transport sector.

The merits of hydrogen in transport are still the subject of intense debate, with several studies finding that H2-powered vehicles will struggle to compete with their electric counterparts on cost, especially in the passenger vehicle segment.

This article first appeared in Recharge's sister title Hydrogen Insight