Hydrogen to play bigger role in green transition

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Zheng Xin
Friday 21 January 2022 12:33
<p>A hydrogen-powered race car is displayed during the fourth China International Import Expo in Shanghai in November 2021</p>

A hydrogen-powered race car is displayed during the fourth China International Import Expo in Shanghai in November 2021

Hydrogen is expected to play a much larger role in China’s decarbonisation, especially in industries such as steelmaking and aviation, where there are few clean energy alternatives, analysts said.

While the country is stepping up development of renewable energy, hydrogen could help cope with the intermittent nature of renewables, as the excessive supplies of renewable power can be used for electrolysis to produce green hydrogen, which can be utilised later to generate electricity, said Ivy Yin, energy transition analyst at S&P Global Platts.

According to S&P Global Platts Analytics, decarbonisation in industrial production is highlighted in China, as the country produces more than half of the world’s steel and cement. Emissions from these products can be reduced dramatically with electrolysis hydrogen, provided the input of electricity is from renewables.

As the world’s largest pure hydrogen user, China consumes 14.6 million metric tonnes per year, making up 20 per cent of global demand. Over 95 per cent of hydrogen is consumed in oil refining and ammonia synthesis, S&P Global Platts said.

The increasing application of hydrogen in these sectors could have a positive influence on carbon emissions reductions as China has a large refining sector and is also the world’s leading ammonia producer at nearly 48 million tonnes per year – a level representing 25 per cent of global supply.

Yin believes China is likely to maximise its efforts to facilitate the production and supply of hydrogen, such as leveraging renewables in North China and Northwest China for massive wind and solar power projects, among which the first batches in the areas comprising 100 gigawatts of wind and solar energy have already launched operations.

“Hydrogen can also be transported across long distances flexibly, which is difficult for renewable energy due to great challenges associated with inter-regional power transmission,” said Yin. “Heavy transportation such as trucking and public transit buses is also a potential market for fuel cell electric vehicles.”

Luo Zuoxian, head of intelligence and research at the Sinopec Economics and Development Research Institute, said hydrogen will likely play a key role in cutting emissions in sectors such as steelmaking, heavy-duty trucks, shipping and cement.

It is believed the government will come up with a more detailed development plan for the hydrogen energy industry soon covering hydrogen production, transportation and consumption, Luo said.

The energy vehicle development plan drafted by the Ministry of Industry and Information Technology said China aims to have one million hydrogen fuel cell vehicles on the road by 2030, with at least 1,000 hydrogen refuelling stations.

Many State-owned enterprises have proposed ambitious hydrogen strategies. State Power Investment Corp Ltd started a demonstration project in the Tibet autonomous region in November 2021, which focused on using hydrogen to overcome the issue of the intermittence of renewable-based power.

One of the challenges for all low-carbon hydrogen projects around the world will be the high-production costs due to current production pathways, said Alan Hayes, an analyst with S&P Global Platts. The key to gaining more prominence for low-carbon hydrogen projects based on electrolysis in the market is to widen access to low-cost electricity from renewable sources, which can also help them maintain regional cost competitiveness, he said.

On the other hand, hydrogen penetration into new markets still requires massive investment in “ecosystem” infrastructure, including hydrogen transportation, storage and delivery, as well as renewable electricity generation.

These challenges are not unique to China, said S&P Global Platts Analytics. Carbon neutral hydrogen, along with renewables and nuclear energy, will need to further grow its share in China’s electricity mix to displace coal and gas, said Yin.

Previously published on Chinadaily.com.cn

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