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

Developing hydrogen energy: an important starting point for zero carbon

Hydrogen energy refers to the energy released by hydrogen in the process of physical and chemical changes. It is an ideal secondary energy source and is considered to be a major strategic direction of global energy transformation. Its industrial chain is divided into three links: upstream hydrogen production, midstream storage and transportation, and downstream terminal consumption, involving a wide range of industrial fields.

From the production side, the advantage of hydrogen energy is that it is convenient to make, store and transport, and relatively environmentally friendly. First, hydrogen energy sources are wide, in addition to fossil fuel hydrogen production, but also can use wind power, solar energy and other forms of electrolytic water hydrogen production. Second, storage and transportation is relatively convenient, hydrogen can be gas, liquid storage in high-pressure tanks, can also be solid-state storage in hydrogen storage materials, relative to the grid transport, large fluctuations, loss of wind energy, solar energy and other advantages. Third, it is relatively green and environmental protection, the combustion product of hydrogen energy is water, and zero carbon emissions can be achieved under the premise of using renewable energy to produce hydrogen, while traditional fossil energy through hydrogen production, rather than direct power generation, its carbon emission intensity will also decrease.

From the application side, the advantage of hydrogen energy is high efficiency and wide application. Compared with other common energy sources, the calorific value of hydrogen combustion is higher, reaching 142KJ/g, which is much higher than other energy sources, so as to improve efficiency. Second, hydrogen is widely used, it can be used as fuel cell power generation, used in automobiles, ships and aviation, and can also be used as a fuel gas or chemical raw material to enter production, and it can also be doped with hydrogen in natural gas pipelines and applied to building heating. At present, in the energy that has been applied on a large scale, only oil can have a variety of functions such as heating, power supply, transportation fuel, and hydrogen is undoubtedly a high-quality energy with a variety of energy characteristics and suitable for a variety of scenarios.

Since the Paris Agreement set a long-term goal of "holding the global average temperature rise below 2 ° C over the pre-industrial period, and striving to limit the temperature rise to 1.5 ° C", many countries have declared to achieve carbon neutrality within a certain period of time. The development of hydrogen energy to promote carbon reduction and optimize the energy structure is one of the important measures to achieve zero carbon emissions.

At present, many countries around the world have introduced the top-level design and strategic route of hydrogen energy. According to the report of the International Hydrogen Council, 31 countries have put forward hydrogen-related strategies at the national level, and these countries account for 73% of global GDP. Overall, the national hydrogen energy strategy of overseas countries, the primary goal is to decarbonize as soon as possible, followed by increasing energy types, among which Australia, Russia, Canada and other countries have the strategic goal of expanding hydrogen energy exports. In the key technical areas, it is mainly focused on reducing the price of hydrogen, developing hydrogen fuel transportation and decarbonizing industry. It is worth noting that due to the differences in resource endowments of countries, there are also differences in the development of hydrogen energy routes, such as Russia, which is rich in natural gas resources, to develop blue hydrogen with natural gas as raw materials, and the unusual green hydrogen as the main technical direction.

We expect that the top-level design of hydrogen energy at the national strategic level may be introduced in the near future. In order to achieve the "double carbon" goal, hydrogen energy will be strongly supported by national policies. We expect that the plan will set a timetable and roadmap for the development of hydrogen-related industries, and set quantitative targets. In terms of key areas of promotion, renewable energy hydrogen production, hydrogen energy storage and transportation, hydrogen fuel cells, and related infrastructure construction may be mentioned.

Current situation of hydrogen energy in China: great potential, many difficulties

China's energy structure is still dominated by fossil fuels, and there is an urgent need to strengthen the development of clean energy. From the perspective of primary energy consumption structure, the proportion of fossil energy such as coal, oil and natural gas in China is as high as 84.1%, and the proportion of non-fossil energy is only 15.9%, which is still a certain distance from the requirements of 20% in 2025, and is far from the target of 80% in 2060. From the perspective of the final energy consumption structure, the proportion of fossil energy is still as high as 61.9%, and the proportion of electric energy is only 26.9%, and from the perspective of power generation, high carbon emissions of thermal power is still the main power generation mode in China, accounting for as high as 70.7%. As a green, clean and efficient secondary energy source, hydrogen energy can optimize the existing energy structure, effectively reduce carbon dioxide emissions, improve environmental problems, and help achieve the "double carbon" goal.

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.

Third, the current application scenario of hydrogen energy is relatively simple, mainly as a traditional chemical raw material. At present, China's hydrogen is mainly used in chemical and steel and other fields, specifically distributed in petrochemical, chemical, coking and other industries, mainly used as chemical raw materials for the production of methanol, synthetic ammonia and various chemical products such as fertilizers. Among them, only a small amount of high-purity hydrogen is used as industrial raw materials, such as high-purity electronic hydrogen, and less than 0.1% of the hydrogen used for energy is applied to fuel cells. It can be seen that at present, hydrogen consumption is still concentrated in the traditional high energy consumption field, and has failed to play its carbon reduction effect, on the one hand, because China's current preparation of high-purity hydrogen capacity is limited, on the other hand, because the relevant application technology development is not yet mature.

Overall, the hydrogen energy industry has a broad space for development in the future. From the perspective of short-term development, we can pay attention to the hot track in the field of hydrogen energy application, especially the construction of hydrogen fuel cells, fuel cell vehicles and hydrogen refueling stations. From the perspective of medium and long-term development, we can pay attention to the upstream renewable energy hydrogen production, electrolytic cell and other tracks, as well as the midstream liquid hydrogen storage and transportation, hydrogen pipeline construction and other tracks.