How does Longi see the relationship between hydrogen, solar PV and storage?
Li Zhenguo: Longi believes that green energy moreover green hydrogen is the best solution to reach carbon neutrality Given the progress of solar energy over the past 10 years, we believe that reducing PV costs will play a key role in promoting the development of hydrogen.
Solar energy (green electricity) fundamentally reduces carbon emissions in hydrogen production and provides a clean energy source for green hydrogen. Its production is an extensive application of solar energy that can bring hundreds of gigawatt-level increments. In addition, green hydrogen is a new type of energy storage which makes it possible to respond to the problems of intermittency. This is what we call the “green electricity-green hydrogen-green electricity” cycle.
The world currently consumes around 80 million tonnes of hydrogen each year, and most of it is grey. If green hydrogen represents 15% of consumption, it requires around 450 GW of PV installations to support it. This is why we say that solar photovoltaic and hydrogen production are inextricably linked in terms of scale and cost.
As a solar PV company, entering the hydrogen industry requires a change in strategy. How did you approach this?
In 2018, Longi started conducting strategic research on the hydrogen value chain. On March 31, 2021, we officially established Longi Hydrogen Energy Technology Co., Ltd and our first hydrogen energy equipment manufacturing plant in Wuxi, China. The first 1000 Nm3 / h alkaline water chlorinator was officially launched in October 2021, and so far several more have been delivered to our customers and put into production. The generation capacity of the Wuxi plant will reach 1.5 GW by the end of 2022 and is expected to reach 5 GW to 10 GW by 2025.
The “green energy plus green hydrogen” solution fully covers synthetic methanol, synthetic ammonia, steel smelting, petroleum refining and other industries that urgently need decarbonization. Hydrogen production will increase rapidly due to the substantial expansion of downstream hydrogen energy use and will dominate in the future era of dual carbon targets.
As a leader in the renewable energy industry, we will continue to invest in R&D to increase efficiency and reduce the cost of solar PV and hydrogen generation. Longi Hydrogen has gradually established technology, operation and marketing teams with experience in large-scale hydrogen power equipment manufacturing and operations management. In addition, we have developed a five-year development strategy for the hydrogen business and are committed to accelerating the global transition to clean energy.
What are Longi’s hydrogen strategic plans?
Longi has launched its Alkaline Water Electrolyzer, which marks a milestone and means we have taken a key step towards becoming a world leader in hydrogen technology. Our electrolyser can provide 1000 Nm3/h hydrogen production and we have already supplied 4000 Nm3/h hydrogen production system for the biggest green hydrogen project in the world. The service life of the equipment exceeds 200,000 hours. The distributed I/O control system realizes automatic and unattended operation. We will continue to invest in R&D and innovation and push for product development based on our technical capabilities.
What is the biggest challenge for hydrogen development and how can it be solved?
Like other green energies, the development of green hydrogen is highly policy-dependent. Interest rates and carbon prices play a critical role in the cost of green hydrogen. We made a simple calculation: if we consider the technical cost, the cost of green hydrogen is around 1.17 to 1.33 US dollars per kg, which is very close or even lower than that of gray hydrogen. This calculation is sensitive to interest rates. If the local interest is 5%, the cost of green hydrogen will rise to around $3.33. Thus, green hydrogen is financially competitive in countries with low rates, such as Europe and Japan; but there are still cost difficulties in China.
The second constraint is the price of carbon. Compared to the production of gray hydrogen, green hydrogen saves about 20 kg of carbon dioxide emissions for each kilogram of hydrogen. Based on the current price of carbon in Europe – which means an additional revenue of around 1.33 USD – this makes green hydrogen more cost competitive. Therefore, green hydrogen has an absolute economic advantage in regions such as the European Union where interest rates are low and carbon prices are high. However, in China, the current Shanghai Carbon Exchange carbon price is only around $8.33 per metric ton, which means an offset rate of around $0.17 for green hydrogen per kg. . This is far from sufficient for the development of Chinese green hydrogen.
We believe that China needs more political support and still has a long way to go to achieve large-scale commercialization and industrialization of hydrogen energy. First, we need a standard definition of ‘green hydrogen’ and a clear penetration target for our fourteenth and fifteenth five-year plans. The country should encourage the use of water electrolysis with renewable energy.
Second, green hydrogen should be included in the energy management system and green hydrogen incentive policies should be put in place. The industry needs appropriate subsidies and incentives for green hydrogen and improved carbon market. Finally, as in the Top-Runner program for solar photovoltaic, we can promote and demonstrate advanced hydrogen technology in the government-initiated Hydrogen Top-Runner program. I believe that with the support of the state and the joint efforts of all market players, China’s green hydrogen industry will develop rapidly and contribute to achieving the dual carbon goals.
What are the green hydrogen price trends?
It is possible to realize 0.25 USD per cubic meter on the production side. The rise in PV industry supply chain costs over the past two years is temporary. I believe the cost of solar PV will continue to drop, and eventually in many places PV will reach 3.33 cents or even less per KWh. In this case, the cost of electricity for water electrolysis would be around $0.15 per cubic meter, allowing hydrogen to reach $0.25 per cubic meter.
What are the main applications of green hydrogen?
We see a variety of industries that need hydrogen, and green hydrogen in particular. For example, in petroleum refining, hydrogen is used as a raw material, reactant and energy source. Hydrotreating is one of the key links in the refining process, involving processes such as hydrogenation, hydrodesulfurization, hydrodenitrogenation and hydrodemetallization. Gasoline and diesel hydrogenation, wax oil hydrogenation and hydrocracking units also require high hydrogen consumption. The global petroleum refining industry consumes 38 million tonnes of hydrogen each year, which represents 33% of global hydrogen demand. The International Energy Agency estimates that the demand for hydrogen in the refining industry will continue to grow. Meanwhile, stricter standards for air pollutants will lead to a further 7% increase in hydrogen use in refining.
In the field of iron and steel smelting, we can use green hydrogen instead of coke as the main reducing agent to reduce iron ore to produce steel. Unlike conventional blast furnaces using carbon monoxide as a reducing agent, which will result in a large amount of carbon dioxide emissions, the use of hydrogen will reduce these and enable the manufacture of low carbon steel. carbon or carbonless. The steel industry has long been one of the industrial sectors with the highest carbon emissions, accounting for 18 percent of China’s total carbon emissions, second only to the power generation and heating sector. That’s why we say that using hydrogen steelmaking technology to replace the traditional steelmaking process will help achieve China’s carbon neutrality goals.
What role will hydrogen play in helping China meet its carbon targets?
When we talk about carbon neutrality, there has to be a carbon sink to match the carbon dioxide emission limit. China only has a few hundred million tons of forest carbon sinks per year, which cannot meet national emissions demands.
Today, 42% of China’s carbon dioxide emissions are related to power generation, and the rest comes mainly from power, chemicals, iron and steel smelting and manufacturing. other areas. Vehicles in future cities can be decarbonized directly with clean electricity, but ocean freighters and aviation aircraft cannot. The battery energy density is still too low to provide continuous power for long-distance transport. In addition, daily heating, cooking and other energy-consuming activities also require cleaner energy. Therefore, the introduction of green hydrogen can help human society achieve deep decarbonization.
Interviewer and author: Vincent Shaw
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