On March 22nd, the "2023 Green Electricity, Green Hydrogen, and Chemical Coupling Development Forum" was held in Changzhou. About 300 representatives from coal chemical, petrochemical, and chemical industry project owners, engineering companies, green power, and green hydrogen technology and equipment industry chains gathered together to discuss industry plans. Bian Tiezheng, Deputy General Manager of Jiangsu Tianhe Yuan Hydrogen Technology Co., Ltd. (hereinafter referred to as Tianhe Yuan Hydrogen), was invited to attend and deliver a speech titled "Analysis of Green Hydrogen Cost Competitiveness". A deep analysis was conducted on the cost competitiveness of green hydrogen from three perspectives: global hydrogen energy status, green hydrogen development status and costs, and downstream application of green hydrogen. The industry solutions of Trina Solar Hydrogen were introduced to the guests.
Bian Tiezheng, Deputy General Manager of Tianhe Yuanhydrogen, shares
From the current global hydrogen energy situation, 42 countries have released hydrogen energy strategies, including a total of 27 countries in EMEA (collectively known as Europe, the Middle East, and Africa), 8 in the Americas, and 7 in the Asia Pacific region. Another 36 countries are undergoing strategic preparations. From the perspective of policy guidance, the United States has committed to providing at least $13 billion in support for clean hydrogen producers in the Inflation Reduction Act, and the European Union's REPower EU plan has introduced a Carbon Price Difference (CCfD) mechanism. Bian Tiezheng said, "Global hydrogen related policy guidance can help green hydrogen achieve cost reduction and promote sustainable development of the industry. Taking the United States as an example, in August 2022, the IRA plan provided groundbreaking tax breaks and provisions that could be directly used for payments for green hydrogen. The bill has different credits based on carbon emissions. Australia has also proposed a clean hydrogen project and will vigorously promote the development of hydrogen energy in the future. Currently, governments around the world have announced a target of 90GW of total installed capacity for electrolytic cells by 2030, indicating a huge market space for hydrogen energy.
At present, the main production and consumption fields of hydrogen worldwide come from fossil fuels. In 2021, global hydrogen production reached 94 million tons, mainly from fossil fuels. In 2021, natural gas hydrogen production accounted for 62%, coal hydrogen production accounted for 19%, industrial by-product hydrogen production accounted for 18%, and electrolytic water hydrogen production accounted for 0.04%. Looking at the domestic market, currently coal based hydrogen production is still the main method in China. China is the world's largest producer and consumer of hydrogen, with most of the hydrogen energy produced and consumed from fossil fuels. In 2020, China's hydrogen production capacity was approximately 41 million tons, with a hydrogen production capacity of approximately 33.42 million tons, mainly from industries such as petrochemical and coking. Among them, coal hydrogen production accounts for 62% of the total, natural gas hydrogen production 19%, industrial by-product hydrogen production 18%, and electrolytic water hydrogen production only accounts for 1%.
Bian Tiezheng analyzed the advantages and disadvantages of hydrogen production methods such as fossil fuel hydrogen production, industrial by-product hydrogen production, electrolytic water hydrogen production, biomass energy, and photolysis water. Among them, electrolysis of water for hydrogen production has the advantages of mature technology, low cost, flexible operation, small equipment size, high output pressure, adaptability to renewable power generation volatility, and high conversion efficiency. Hydrogen production by electrolysis of water is mainly divided into alkaline electrolysis, PEM electrolysis, and SOEC electrolysis. The technological maturity of the three electrolysis methods also varies, with large-scale application of alkaline electrolysis, small-scale application of PEM electrolysis, and commercialization of SOEC electrolysis.
When discussing the current development status and cost of green hydrogen, Bian Tiezheng stated that among the mainstream alkaline electrolytic water hydrogen production equipment, the hydrogen production efficiency is about 5kWh/Nm ³， The cost of electricity accounts for about 85%, so its economy is greatly affected by electricity prices. At present, the DC power consumption of the Tianqing alkaline water hydrogen production equipment, which has been mass-produced by Tianhe Yuanhydrogen, can reach 4.3kWh/Nm ³， It can improve the efficiency of hydrogen production and help the industry reduce costs and increase efficiency. On the other hand, with the increasing rate of light abandonment year by year, it is necessary to find a direction for reasonable storage that cannot absorb electricity, which is also conducive to reducing the cost of hydrogen production and providing more development space for photovoltaic hydrogen production.
Specifically, firstly, with the continuous increase in the installed capacity of photovoltaic wind power in China, the rate of solar and wind abandonment has been increasing year by year, maintaining between 1% -4%. The high amount of electricity that cannot be consumed through grid connection, coupled with the volatility of photovoltaic power generation, requires finding a direction for reasonable storage of electricity that cannot be consumed. Secondly, the northwest region has abundant photovoltaic resources, but there is a serious phenomenon of light abandonment. A large amount of photovoltaic power generation can only become "garbage electricity" due to insufficient consumption, affecting the economic benefits of enterprises. Thirdly, photovoltaic hydrogen production is one of the important ways to reduce the cost of hydrogen production. 10MW photovoltaic can produce 2000Nm per hour ³ In places with good lighting, the cost of photovoltaic power generation for hydrogen production is significantly lower than the current cost of electricity for hydrogen production, which is beneficial for improving the economic efficiency of hydrogen production. Fourthly, with the increasing demand for hydrogen in heavy trucks, ships, commercial vehicles, cogeneration, industrial metallurgy, and other industries, and the continuous expansion of the terminal hydrogen market, green hydrogen has broad prospects for future development.
In the trend of continuous cost decline, the application of green hydrogen is also worth paying attention to. Bian Tiezheng mentioned that in the 2021 global hydrogen energy utilization structure, refining hydrogen accounts for 42%, synthetic ammonia hydrogen accounts for 36%, methanol hydrogen accounts for 15%, and steel hydrogen accounts for 6%; In China's hydrogen energy utilization structure in 2021, the proportion of hydrogen used for synthetic ammonia is 37%, that for methanol is 19%, that for other industries is 19%, that for direct combustion is 15%, and that for refining is 10%. In the future, there will be significant market opportunities for hydrogen for synthetic ammonia and methanol.
On the other hand, the maturity of the carbon market will also drive the development of downstream markets. The EU's "carbon border tax" will officially come into effect in October 2023, further increasing the costs of the steel and electrolytic aluminum industries. On February 9, 2023, the Committee on Environment, Public Health, and Food Safety of the European Parliament officially passed the European Carbon Border Adjustment Mechanism (CBAM) agreement, which takes effect on October 1, 2023. It will impose taxes on imported carbon intensive products such as steel, cement, fertilizers, and aluminum. Starting from January 1, 2026, the EU's free quota will also be gradually reduced and will be completely abolished by 2034. At the same time, for imported products, carbon fees are also paid based on the carbon emissions generated during the production process.
After in-depth analysis of the cost competitiveness of green hydrogen from three perspectives: global hydrogen energy status, green hydrogen development status and costs, and downstream application of green hydrogen, Bian Tiezheng summarized: "With the decline of renewable energy electricity, the maturity of the carbon market, and the continuous expansion of the terminal hydrogen market, the competitive value of green hydrogen costs will further manifest, and more solutions are needed to promote the healthy development of the hydrogen market." As an equipment manufacturing enterprise with electrolytic water hydrogen production technology as its core, it currently covers four major business sectors: hydrogen production equipment, hydrogen production systems, mobile hydrogen production stations, and industry solutions. The rated hydrogen production capacity of the mass-produced Tianqing electrolytic cell is 1000Nm ³/ h. The maximum hydrogen production per tank of the same series of products can reach 2000Nm ³/ H. It has the characteristics of environmental friendliness, no pollution, high density, low energy consumption, flexibility and mobility, adaptability to multiple scenarios, intelligence, modularity, etc. By standardizing production to maintain product quality, it can reduce equipment investment by 30% and have a service life of up to 20 years.
In the future, Tianhe Yuanhydrogen will continue to explore product intelligence, apply "data+algorithms" to generate and realize data value, transform data value into service value of smart supply chains, and adhere to long-term investment in exploring and practicing green and low-carbon models, promoting high-quality development of hydrogen energy in the clean and low-carbon transformation, and contributing more efforts to achieving carbon peak and carbon neutrality goals.
