Hydrogen energy: Pain Points and Opportunities - The "Energy Revolution" research series

From the perspective of resource endowment and industrial base, China is the world's first hydrogen producing country, and China has good conditions for developing hydrogen energy. According to the statistics of the International Hydrogen Energy Association quoted by the Chinese government network and the Economic Daily, the current international hydrogen production is about 63 million tons per year, and China produces about 22 million tons of hydrogen per year, accounting for one-third of the world's hydrogen production, and most of them are relatively low-cost coal hydrogen, which can provide sufficient low-cost hydrogen sources for the initial stage of hydrogen energy and fuel cell industry development.

Moreover, our country is rich in hydrogen production resources, and the abandoned power resources can be used as an important source of hydrogen energy supply. China is the world's largest renewable energy power producer. By the end of 2020, the total installed capacity of renewable energy in China has reached 930 million kilowatts, accounting for more than 80% of the global total. China annually in wind power, photovoltaic, hydropower and other renewable energy on the abandoned power of about 100 billion KWH, can be used for electrolytic water hydrogen production of about 2 million tons, renewable energy is expected to become China's main source of green hydrogen supply.

At present, China is also one of the fastest developing countries in the world, and China accounts for a relatively high proportion of the global investment in hydrogen energy projects by the beginning of 2021. According to the statistics of the International Hydrogen Energy Association, a total of 228 projects have been completed, under construction or planned in the global hydrogen energy industry chain, mainly in Europe, Australia, Asia, the Middle East, Chile and other countries and regions. In terms of geographical distribution, Europe is expected to account for the largest share of investment (around 45%), followed by Asia, while China leads with around 50% of total investment in Asia.

Although the potential is large and the growth rate is fast, China's hydrogen energy industry still faces the following difficulties.

First, China produces mostly high-emission gray hydrogen. Depending on the method of production and the amount of carbon emitted during the process, hydrogen can be divided into gray hydrogen produced from fossil fuel combustion, blue hydrogen produced through carbon capture and storage technology to reduce carbon emissions, and green hydrogen produced from clean and renewable energy sources. From the perspective of energy conversion efficiency and emissions, there is no doubt that low-emission and high-efficiency green hydrogen, especially hydroelectricity and wind energy electrolytic hydrogen production is the main direction in the future.

China's current coal chemical industry development is relatively mature, in 2016, China's coal hydrogen accounted for 62%, compared with the global level of hydrogen supply only 18% of coal hydrogen, and in the hydrogen industry is the most developed Japan, the proportion of coal hydrogen is only 6%, the proportion of green hydrogen produced by electrolytic water is as high as 63%. In the case of coal as the main source of hydrogen production, the level of carbon emissions compared with the direct use of coal is almost the same, can not meet the requirements of low carbon, so currently we face a difficulty is the need to increase the development and application of green hydrogen manufacturing technology proportion.

Second, the production, storage and transportation technology is weak, and the price of green hydrogen will be higher in the short term. From a vertical comparison point of view, only Guangdong Province in China has announced the price of hydrogen for energy since 2016, and it can be seen that it has maintained a rising trend in recent years. From a horizontal comparison point of view, in the first half of 2021, the price of hydrogen in Germany is 74.4 yuan/kg, the United States is 106.35 yuan/kg, Japan is 70 yuan/kg, and China is only 60-70 yuan/kg.

Although the price of hydrogen in China is not high, it should be noted that this is due to the fact that China's hydrogen supply is currently dominated by coal to hydrogen, according to the data of the International Energy Agency, the price of coal to hydrogen in 2018 is about 1.2-2.2 US dollars/kg, and the price of green hydrogen is as high as 3-7.5 US dollars/kg, so the short-term hydrogen price is relatively low. On the other hand, because the current government gives a large amount of subsidies on hydrogen consumption, the actual price of hydrogen is only about 40 yuan/kg, but the subsidy is difficult to maintain for a long time. If the proportion of green hydrogen increases in the future and the amount of subsidies decreases, the price of hydrogen will rise significantly.

In addition to production costs, China's hydrogen storage and transportation costs are also facing the possibility of rising. At present, 20MPa gaseous high pressure hydrogen storage and long tube trailer transportation are commonly used in China, and the cost is about 20 yuan/kg, accounting for half of the terminal consumer price of hydrogen. However, the gas transport hydrogen storage density is low, high compression energy consumption, only suitable for hydrogen stations with a daily demand below 300 kg and a short transportation distance, with the expansion of the domestic hydrogen scale in the future and the extension of the transportation distance, 50MPa gas high-pressure hydrogen storage or liquid hydrogen transportation can meet the requirements of high efficiency and economy, and the proportion of low temperature liquid hydrogen storage abroad is as high as 70%. However, under the existing technology in China, the total cost of the liquefaction process is high, and the initial fixed investment in equipment is large, which will further increase the price of hydrogen in the future.