China offers promise for clean energy in a world dominated by fossil fuel-driven hydrogen projects through its new green hydrogen mega-plant. China is planning a huge green hydrogen project using solar and wind power for its Inner Mongolia region. A cluster of plants will be constructed in the cities of Ordos and Baotou, expected to use 1.85 GW of solar power and 370 MW of wind power to produce approximately 66,900 tonnes of green hydrogen every year, according to the Hydrogen Energy Industry Promotion Association.
If used for Fuel cell electric vehicles (FCEVs) it would replace the need for as much as 180 million gallons of gasoline a year, which would help China on its way to achieving its aim of 10,000 CVEVs and 74 hydrogen filling stations by 2025 in Beijing alone.
Development of the project is expected to commence as early as October this year, aiming to be in operation by mid-2023, far before many other international green hydrogen projects currently underway.
Inner Mongolia is currently one of China’s biggest coal mining regions and is now set to be a renewable energy hub if the hydrogen project is successful. China still relies heavily on its large coal industry but accepts that it must gradually transition towards renewable alternatives and decarbonize over the coming decades, with an aim to be carbon neutral by 2060 following a peak in carbon emissions in 2030.
This is just the latest in China’s hydrogen craze, with the country’s hydrogen industry forecast to be worth $154 billion within five years, and 12 times that figure by 2050.
Industrial titans Sinopec, the Ningxia Baofeng Energy Group, and China Baowu Steel Group all currently have hydrogen projects underway in China.
Sinopec is aiming to produce 500,000 tonnes of green hydrogen by 2025, with projects in Inner Mongolia and Xinjiang. The company currently produces 3.84 million tonnes of hydrogen annually, but much of this comes from coal production. The firm also hopes to establish 1,000 hydrogen filling stations across China.
The Ningxia Baofeng Energy Group announced in April the commissioning of the 'world's largest solar-powered hydrogen' project in China's northwestern Ningxia autonomous region. The coal-producing company joined a national pilot program to develop the country’s renewable energy sector. Baofeng aims to decrease its CO2 emissions by 50 percent over the next ten years. The company hopes the new development will cut coal use by up to 254,000 tonnes a year, thereby cutting 445,000 tonnes of CO2 emissions every year.
Finally, the China Baowu Steel Group announced a new partnership with Honeywell International in July, with the aim of producing hydrogen energy. Honeywell’s hydrogen project will support Baowu steel production, used in components for FCEVs. At present, the ferrous metals sector accounts for around 15 percent of China’s carbon emissions, making this transition of great significance.
Foreign companies are also eager to support the development of China’s green hydrogen as supermajor Royal Dutch Shell, as Shell China, signs an agreement with Shanghai Electric to develop green hydrogen in the country. Shell and Shanghai are also open to developing carbon capture and storage (CCS) technologies to build upon the existing grey hydrogen market.
Shell has already established its reputation for hydrogen production in China after announcing a joint venture with ZJK JT in 2020. The two companies plan to develop a 20-MW hydrogen electrolyzer in the Hebei province to produce green hydrogen from wind and solar power. This hydrogen will power refueling stations in Zhangjiakou, north of Beijing, the host city of the 2022 Winter Olympics. The first phase of the project will see the production of around 3000 metric tonnes of green hydrogen annually.
The development of green hydrogen rather than grey hydrogen, deriving from fossil fuels, also puts China at a competitive advantage to its European counterparts, many of whom continue to rely on CCS technologies to convert CO2 emissions from oil and gas to hydrogen.
While China is a major contributor to global carbon emissions, releasing approximately 10.17 billion tonnes of CO2 into the atmosphere every year, this push to develop fully green hydrogen on a large scale will put it in the favor of the International Energy Authority and the UN’s International Panel on Climate Change, both of which released landmark reports this year on the need to decarbonize the world, shifting away from fossil fuels towards renewable alternatives.
However, the cost of developing China’s green hydrogen sector cannot be overlooked. The reason so many countries around the globe are sticking to grey hydrogen projects is down to cost. To become successful in leading the world in green hydrogen development, China must be prepared to support companies through a green-financing system, to alleviate the financial burden of developing such substantial green energy projects while both knowledge of hydrogen use and its demand potential is still being established.
Following several announcements from national companies and supermajors this year, China looks set to be leading the world in green hydrogen over the next decade. However, to make this successful the government will have to continue to support companies through this development through initiatives such as the pilot project, the promotion of new energies in the 2022 Winter Olympics, city EV trials, and more general green energy financing.
By Felicity Bradstock for Oilprice.com
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