Chinese state-controlled oil firm Sinopec and Solar Manufacturer Longi Green Energy Technology are teaming up to advance the green hydrogen transition, while government policies continue to centre on downstream hydrogen applications.

Longi officially entered the hydrogen market on 31 March, with the incorporation of a new business unit, (Xi’An) Longi Hydrogen Technology.

A co-operation framework signed on 13 April is its commitment to help Sinopec build its photovoltaic assets that will be key for the oil firm’s transition to low-carbon or green hydrogen production at the centre of its decarbonisation strategy, although no details of a plan for the partnership have yet been announced.

Green hydrogen is typically produced from renewable energy sources through the process of electrolysis by splitting water into hydrogen and oxygen

Sinopec already produces 3.5mn t/yr of grey hydrogen from natural gas. It is aiming to become China’s largest hydrogen energy company by 2025 through investments in upstream production, as well as downstream refuelling stations. But shifting from fossil- to renewables-based hydrogen will be crucial to making the fuel work towards China’s goals of peaking carbon emissions by 2030 and reaching carbon neutrality by 2060.

Innovation in photovoltaics over the past few years have dramatically reduced solar electricity costs per kilowatt-hour, setting the stage for a viable green hydrogen industry, according to Sinopec chairman Zhang Yuzhou at the co-operation framework signing event. But the investment costs of electrolysers needed to turn clean electricity into hydrogen are still prohibitively high, with currently only four demonstration green hydrogen plants operating in China with two using solar.

Semiconductor and solar wafer producer Zhonghuan Energy and Hebei Qixin Investment Management in 2016 brought on line a 20MW coupled solar and wind-based hydrogen facility to generate electricity in north China’s Hebei province’s Zhangjiakou for a cost of 250mn yuan ($38mn).

A 1,000 t/yr solar liquid fuel plant that hydrogenates carbon dioxide to synthesise green methanol in Lanzhou in west China’s Gansu province that launched in January 2020 cost state-controlled Lanzhou New Area Petrochemical Industry Investment Group Yn140mn.

Private-sector solar firms with demonstration projects in the pipeline is photovoltaics and inverter firm Sungrow, which is investing close to Yn20bn across three solar ventures, one coupled wind-solar and another wind project.

China has yet to join the ranks of countries with a national hydrogen strategy that may systematically bring down electrolyser costs, with the central government instead offering subsidies aimed at commercialising the downstream or fuel cell vehicle sector of the industry.

Municipal government hydrogen plans have multiplied in recent months in response to the subsidy scheme announced in September last year, which will award up to Yn1.7bn to regions that build a successful fuel cell vehicle network.

Beijing’s Economic and Information Technology Bureau yesterday closed public comments on its Beijing Hydrogen Energy Industry Development Implementation Plan for 2021-25 first released on 7 April, which aims to cultivate a Yn100bn hydrogen and fuel cell industry in the Beijing-Tianjin-Hebei region over five years.

With only a cursory nod to “gradually increasing” the proportion of green fuel in hydrogen supplies, the main strategy concentrates on building a network of more than 10,000 hydrogen fuel cell vehicles and 74 refuelling stations, with more than 10MW of installed distributed hydrogen power generation capacity by 2025. It also plans to bring down the end cost of hydrogen fuel by over 30pc by 2030 through breakthroughs mainly in transport, storage and fuel cell technologies.

While the government’s funding competition has created increased interest in hydrogen, its disjointed focus on downstream transport applications is doing little to encourage the shift from grey to green.

A comprehensive hydrogen strategy with clear policy signals and incentives to support electrolysis is needed to ramp up renewables electrolysis by 2030, according to think to tank the Green Belt & Road Initiative Centre.

The International Renewable Energy Agency recommended clear targets for electrolyser capacity, tax breaks or capital grants for setting up facilities, along with feed-in tariffs for green hydrogen as policy mechanisms to boost growth in electrolysis last year in its report Green Hydrogen: A Guide to Policy Making.

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