Dewa signed a memorandum of understanding for a study into the construction of the hydrogen plant, based on integrated gasification combined cycle technology. Depending on the outcome of the study, Dewa will decide whether to pursue the project or opt for conventional coal-fired power plants.

A consortium of the US’ Sino Global International, Canada’s Skyline Services Group and China’s Samena Power & Energy approached Dewa with the proposal to build the 2,000MW hydrogen power plant, the largest in the world.

The $3bn project would be constructed in two phases, with the first 1,000MW coming online in 2011 and the remaining 1,000MW to follow in 2012.

Synthetic gas will be produced from coal through gasification in the US. It will then be shipped to Dubai where hydrogen will be extracted from it.

Sino Global is already building a similar project in Louisiana in the US.

“All they have is a pilot plant in the US,” says a source at Dewa. “It is not proven yet. We have to see, because there are not many plants that run on hydrogen in the world.”

For this reason, Dewa says it will continue to pursue the option of conventional coal-fired and nuclear plants as well (MEED 22:02:08).

A hydrogen plant would be more environmentally-friendly as it does not produce any emissions, but it is also the more expensive option. It would cost $1,400 a kW to build a conventional coal-fired plant and $1,800 a kW to build the gasification-based plant.

If the feasibility study shows the plant to be viable, it will be built as an independent water and power project and Dewa will buy the power and water it produces.

Securing financing for the project could prove difficult. “The key is to find the banks to support it and they won’t do that unless they find the idea successful,” says the Dewa source.