NEOM Project: What it is and why it will transform the energy future

The NEOM project is a strategic initiative by Saudi Arabia aimed at profoundly transforming the urban, energy, and economic model of the 21st century. At the heart of this megaproject, green hydrogen represents a fundamental energy source for advancing decarbonization and promoting a sustainable transition at the global level.

The collaboration between ACWA Power, Air Products, and NEOM has given rise to the world’s largest integrated green hydrogen production complex. This article examines the technical fundamentals, infrastructure, technology involved, and challenges facing this pioneering initiative on a global scale.

What is the NEOM project?

The NEOM project is an urban-industrial development initiative promoted by the Saudi Arabian government as part of its Vision 2030 plan, which seeks to diversify its economy and lead the global energy transition. The project involves the construction of a 26,500 km² megacity, divided into functional zones such as The Line (a linear, emission-free city), Oxagon (a floating industrial center), Trojena (an alpine tourism zone), and Sindalah (a tourist island).

NEOM’s infrastructure is designed to operate 100% on renewable energy, incorporating artificial intelligence, autonomous mobility, advanced urban planning, and clean technologies. It is conceived as a completely reimagined urban-industrial model that fuses sustainability, automation, and a knowledge-based economy.

Since its conception in 2017, NEOM has been proposed as a strategic response to the exhaustion of the oil-dependent economic model. Its central objective is to build, from scratch, a self-sufficient urban and industrial ecosystem that exports clean energy.

By 2045, the city is expected to be fully operational, home to up to 9 million people, and established as a global energy hub for green hydrogen production, clean mobility, and urban intelligence.

Complementing this vision, the following institutional video from the NEOM Green Hydrogen Company (NGHC) shows the consortium’s global strategy.

NEOM: Energy infrastructure for a model city

Strategic vision and regional planning

The NEOM project, known internationally for its scale and ambition, is not a conventional city; it is a set of specialized zones designed to operate entirely on clean energy.

This approach requires an integrated energy infrastructure, where solar, wind, and thermal storage sources are connected through digitized and automated control systems. This planning is part of an advanced urban planning model based on sustainability, modularity, and energy efficiency.

Optimal location for renewable production

The site chosen for the hydrogen plant is Oxagon, NEOM’s floating industrial city in Saudi Arabia, located on the Red Sea coast, a region with average solar irradiance of 2,200 kWh/m²/year and constant wind speeds exceeding 9 m/s.

These location conditions allow for the joint operation of hybrid photovoltaic-wind systems for electrolysis (PV–Wind–H₂) with a high plant factor, necessary to ensure continuous supply to the electrolysis plant.

NGHC: Energy consortium for green hydrogen

The NEOM Green Hydrogen Company is a consortium formed by ACWA Power, Air Products, and NEOM, responsible for the design, construction, and operation of the world’s largest green hydrogen complex. This consortium operates under a vertically integrated project model, in which each partner contributes complementary and strategic capabilities:

• NEOM, as the landowner, provides the industrial land in Oxagon, along with basic infrastructure, regulatory permits, port logistics, and urban services, integrating the complex into NEOM’s sustainable urban planning.
• ACWA Power is leading the design, financing, and supply of a renewable energy park of approximately 4 GW, consisting of bifacial solar photovoltaic plants with single-axis trackers, onshore and offshore wind turbines, and energy storage systems. It is also responsible for the comprehensive management of the hybrid energy system, ensuring continuous operation.
• Air Products is acting as the EPC contractor for the entire hydrogen production plant and is the exclusive offtaker of the green ammonia produced. It will also be responsible for the air separation units, storage infrastructure, compression, liquefaction, and export, ensuring the complete chain up to international transport.

The technical design is based on a modular and scalable system, connected to large-capacity alkaline electrolysers, powered by 100% renewable energy, with on-site thermal storage and chemical conversion. NGHC represents an example of global leadership in the industrialisation of green hydrogen.

According to official reports, construction of the complex is 80% complete, and renewable generation capacity is expected to reach 4 GW by mid-2026, with green ammonia production estimated for 2027.

For a visual understanding of this advanced stage of development, the following official video from Air Products offers a clear perspective on the technical progress of the complex, including the installation of turbines, photovoltaic modules, electrolysis blocks, and logistics infrastructure at Oxagon.

Technical design of the green hydrogen complex

Renewable energy production

The complex’s energy system consists of:

• 2.2 GW of solar energy, using PERC bifacial photovoltaic modules mounted on single-axis trackers, which optimize capture in areas of high irradiance and reduce losses due to reflection;
• 1.6 GW of wind energy, generated by 5.6 MW onshore turbines adapted to desert conditions;
• Thermal storage systems and BESS batteries, designed to stabilize the hybrid grid, compensate for intermittency, and maintain constant 24/7 electrical operation for the electrolysis system.

Large-scale electrolysis

The plant uses high-capacity industrial alkaline electrolysers supplied by Thyssenkrupp nucera, with an energy conversion efficiency of 70% (LHV). The system consists of 30 modular electrolysis blocks, configured in islanded mode, i.e. directly connected to the renewable grid without connection to an external grid.

This architecture optimizes the overall performance of the system by minimizing conversion losses and maximizing functional integration between renewable generation and real-time electrolysis demand.

Green ammonia synthesis

The hydrogen produced is converted into green ammonia (NH₃) through a low-emission Haber-Bosch synthesis process, combining it with nitrogen extracted from the air using separation units. This stage is carried out under high pressure and temperature conditions, optimized for energy efficiency.

The ammonia is stored and exported from the Oxagon industrial port to international markets, especially in Asia and Europe, where rapid growth is projected in sectors such as maritime transport, carbon-free fertilizers, and renewable energy generation.

Energy monitoring and automation technology

The complex operates with an advanced Energy Management System (EMS) based on artificial intelligence and machine learning; this system manages energy generation, storage, and consumption variables in real time, integrating weather forecasts, solar-wind generation curves, load simulations, and predictive maintenance algorithms for turbines, inverters, and electrolysis stacks.

The complete digitization of the system makes NGHC a global benchmark in energy automation applied to green H₂.

Contribution to decarbonization and the global energy market

Scalability and emissions reduction

With a projected capacity to avoid the emission of up to 5 million tons of CO₂/year, the complex actively contributes to climate neutrality goals. It is estimated to produce 1.2 million tons of green ammonia per year, used as an energy carrier for industrial sectors such as steel and maritime transport, which are traditionally carbon intensive.

Acceleration of the global hydrogen market

The NEOM project model represents a breakthrough in the industrialization of green hydrogen. Its export-oriented approach helps create the conditions to achieve a Levelized Cost of Hydrogen (LCOH) of less than $2/kg by 2030 in regions with optimal radiation and logistics. NGHC has the potential to become a catalyst for the global adoption of hydrogen as a clean energy carrier.

Industrial impact, employment, and technology transfer

The project has strategic implications for the transformation of Saudi industry:

• Generation of up to 10,000 direct and indirect jobs during its construction and operation.
• Promotion of technology transfer in areas such as electrolyzer design, turbine manufacturing, SCADA integration, and hybrid plant maintenance.
• Development of an industrial ecosystem in Oxagon, combining advanced production, specialized logistics, and high-level technical training.

In addition, this project incorporates sustainable urban planning practices, focused on efficient use of resources and social sustainability, thus strengthening its replicable model on an international scale.

Complementing the industrial impact, NEOM has already begun to realize its tourism vision with the official opening of Sindalah, the first luxury island in the Red Sea, which is projected to receive 2,400 visitors per day by 2028 and generate more than 3,500 regional jobs, consolidating the diversified economic development driven by Vision 2030.

Critical factors and operational risks of the project

Costs, competitiveness, and demand

Despite technical advances, green hydrogen faces economic constraints: high capital expenditure (CapEx) costs, demand uncertainty, and competition from blue hydrogen. NGHC has mitigated these factors through non-recursive financing, long-term purchase agreements (PPAs), and alignment with Saudi Vision 2030, which supports development with a regulatory framework and incentives.

Operational sustainability and water management

One risk factor is the availability of water for electrolysis in a desert area. To address this, a solar-powered reverse osmosis desalination plant was built, coupled with heat recovery and brine management systems, minimizing environmental impact. However, the water balance and ecological footprint still require long-term life cycle studies.

Conclusions

The NEOM project, and in particular its NGHC complex, represents a step forward in the global energy transition by demonstrating the technical and economic viability of large-scale green hydrogen production. By integrating renewable sources, advanced electrolysis technologies, and smart energy systems, it establishes a model that can be replicated even in extreme geographical conditions.

Beyond its local impact, NEOM challenges conventional energy paradigms and paves the way for a new approach to sustainable urban development. Its progress confirms that engineering can lead the way in solutions that harmonize growth, innovation, and environmental preservation. In this sense, NEOM is not only a project of the present, but a tangible window into the planet’s energy future.

References

1. AIR PRODUCTS, NEOM Green Hydrogen Complex, site: https://www.airproducts.com/energy-transition/neom-green-hydrogen-complex
2. NGHC – Official – site: https://nghc.com
3. ACWA Power – NEOM Green Hydrogen Project – site: https://acwapower.com/en/projects/neom-green-hydrogen-project