Renewable curtailment, as a sign of oversupply, also induces to low electricity price (or even negative price) regionally and seasonally in China. In that sense, hydrogen provides an incremental market for the stranded wind and solar asset. Meanwhile, waste of wind, solar, and hydropower source, or renewable curtailment, has been a rooted problem in the industry, given the country’s specific power market structure. The latter two areas are the future directions China look to explore.Ĭhina is also home to the world’s largest wind and solar capacity. And renewable-to-gas (often seen in the U.S and Canada, cost around $5-5.9/kg) is greener. While fossil fuel production is still the most economical option right now, electrolysis (more adopted by Japan, cost around $5.2/kg) outperforms the other methods in obtaining high-purity gas. The choices of Europe, US, and Japan are different, where steaming reforming of natural gas, renewable-to-gas, and electrolysis of water are the standard options. Currently, China’s hydrogen production cost is at US$2.6/kilogram via the fossil fuel method. China deploys mostly the first two methods, specifically the coal synthesis to hydrogen production and chemical production to hydrogen byproducts (by oil refining, Chloralkali, ethane cracking, and palladium hydride). The technical options for making hydrogen encompasses mainly three methods of fossil fuel, industrial process (Chloralkali), and electrolysis of water. What China looks to reform, however, is the contributing sources of its hydrogen market. ![]() In 2018, China produced more than 8 million tons of hydrogen, about double of that in the U.S. Hydrogen production is one of the few areas China is leading-in terms of production size. And in today’s energy iceberg, we aim to examine the skeleton of the Chinese hydrogen value chain. China lacks key equipment for FCVs development including recirculation system and othersīeijing and Chinese local governments have unfolded ambitious plans to foster the whole hydrogen value chain, as we mentioned in various articles such as this one.īut how is the status quo of the Chinese industry? How does it compare to the gold leading practice? Where does China lag, and where does it aim to improve? The answers to these questions are the first step to identify a business opportunity in the heated market.China has the largest market size of hydrogen production but looks to build the new sector upon renewable and cleaner sources. ![]()
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