Since February 2022, 131 large-scale hydrogen energy development projects have been launched worldwide. It is estimated that by 2030, the total global investment in the field of hydrogen energy will reach 500 billion US dollars. The World Energy Council predicts that by 2050, hydrogen energy will account for up to 25% of the global final energy consumption. At present, more than 200 hydrogen energy plans and guidelines have been issued in more than 20 provinces across the country. There are more than 300 industrial enterprises above the designated size in the whole industrial chain, which are concentrated in the Yangtze River Delta, the Great Bay Area of Guangdong, Hong Kong and Macao, and the Bohai Rim. The hydrogen energy industry presents a trend of cluster development.
It can be seen from the recent series of major events in the hydrogen energy industry that the hydrogen production link in the hydrogen energy industry chain with green hydrogen production equipment as the core has entered a new stage of development.
| Frequent "spring breeze" in policy
The National Development and Reform Commission issued the Medium and Long-term Plan for the Development of the Hydrogen Energy Industry (2021-2035) on March 23, 2022 (hereinafter referred to as the "Medium and Long-term Plan for the Industry"), reflecting the development orientation of the policy for the future hydrogen energy industry, and clarifying the application scenarios and fields of policy incentives, outlining the medium and long-term blueprint for the development of hydrogen energy, which will help strengthen investors' confidence in the development of the hydrogen energy industry and boost the long-term expectations of industry participants. The medium and long-term planning of the industry mainly has three core points for investment, including hydrogen energy positioning, future development goals and application direction.
In the industrial positioning, hydrogen energy has been officially identified as energy and is an important part of the energy system. In addition, the relevant links of the hydrogen energy industry chain have also been included in the scope of national strategic emerging industries. The relevant quantitative development goals mainly correspond to the goal of 2025. One goal is to achieve 50000 hydrogen vehicles, and the other goal is to produce 100000 to 200000 tons of hydrogen from renewable energy. For the future application direction, the policy plans four major areas including transportation, energy storage, distributed energy and carbon reduction in the industrial field.
In the field of transportation, the policy mentions the advantages of fuel cell vehicles in commercial vehicles, and also proposes that hydrogen vehicles are complementary to lithium electric vehicles; In the field of energy storage, the advantages of hydrogen energy storage are mainly in long-period and large-scale scenarios; The application of distributed energy can be seen as the expansion of the field of energy storage, which mainly uses the characteristics of flexible conversion of hydrogen energy between different energy sources. The carbon reduction of hydrogen energy in the industrial field is mainly to replace the traditional fossil energy as fuel or chemical raw material, which is expected to be widely promoted in the "carbon neutral" stage.
| Domestic enterprises are expected to rely on cost advantages to go to sea
The United States, Europe, Japan and South Korea are relatively leading regions in the development of hydrogen energy in the world, while Saudi Arabia, the United Arab Emirates and other countries in the Middle East have also targeted hydrogen energy. Although Saudi Arabia has not published a written document, it has put forward a strategic goal of hydrogen energy. The main logic of global hydrogen energy development is as follows: First, realize the transformation of clean energy from the perspective of environmental protection. For example, in Europe, under the framework of EU ETS, all countries are responsible for decarbonization; Second, from the perspective of energy security, China's fossil energy endowment is poor, and we hope to get rid of the heavy dependence on fossil energy through the hydrogen revolution. For example, the conflict between Japan and South Korea, Russia and Ukraine, makes the EU also take the development of hydrogen energy as an important direction of energy security; Third, for economic reasons, they want to maintain the leading position in the industry or earn economic benefits through hydrogen export, such as the United States, Australia, Saudi Arabia and other countries in the Middle East.
24632345-fCWKY9.jp
The manufacturing cost of alkaline electrolytic cells in China is less than 300 US dollars per kilowatt, which has a significant cost advantage. At the same time, China's strong photovoltaic industry is expected to drive the shipment of electrolytic cells. Photovoltaic enterprises are already closely related to the hydrogen energy industry. Longji, Trina Solar and GCL are all cross-border hydrogen energy. The opening of overseas markets may make the cooperation between photovoltaic enterprises and electrolytic cell enterprises closer and go to sea hand in hand. Based on the above two advantages, China's electrolytic cell has the ability to seize the international market, and the photovoltaic electrolytic cell integration and electrolytic cell enterprises are expected to take the lead in benefiting. To sum up, the hydrogen energy policy in 2022 will be strong, the domestic policy framework will be gradually improved, and the officially promoted international cooperation will also begin.
Looking forward to 2023, the focus of the market is expected to shift from the policy catalysis itself to the actual implementation effect of local policies and the progress of the realization of quantitative objectives. If the implementation of local policies is effective, the industrial policies at all levels will overlap and resonate, and the speed of industrial expansion may exceed expectations.
| The number of renewable energy hydrogen production projects is increasing, and the business model is gradually improving
Technical route analysis of electrolytic cell: alkaline electrolytic cell is the current mainstream, and cost reduction of PEM electrolytic cell is the key.
The Medium and Long-term Development Plan for Hydrogen Energy released by the National Development and Reform Commission puts forward the goal of achieving 100000 to 200000 tons/year of hydrogen production from renewable energy by 2025, taking "green hydrogen" as an important part of new hydrogen energy consumption, and achieving 1 to 2 million tons/year of CO2 emission reduction. Because the market generally believed that the cost parity of green hydrogen would be achieved around 2030, and the "green hydrogen" would be massively increased after entering the "carbon neutral" stage.
However, with the clear policy objectives of 2025, it is expected that the promotion of hydrogen production from renewable energy will also be accelerated. At present, the world's mature hydrogen production technology of electrolytic water is mainly alkaline electrolysis and PEM electrolysis. There are also obvious differences in the cost composition between the two. The absolute cost of hydrogen production by PEM electrolysis of water is high, mainly bipolar plates, membrane materials, platinum, iridium and other noble metal catalyst materials, and the cost is significantly higher than that of alkaline electrolytic cells.
Comparing the current mainstream electrolytic water hydrogen production technology and the technology with development potential, we look forward to the timeline of technological route evolution: alkaline electrolytic water technology, with its advantages of low cost and high technology maturity, is currently the mainstream route in China, and is expected to occupy the leading position of electrolytic water hydrogen production technology for a long time. At present, PEM electrolytic water technology has initially formed industrialization and has been built in some areas for demonstration application. With the progress of technology and the decline of cost, it is expected that it will form large-scale application as soon as 2025~2030. Solid oxide water electrolysis technology (SOEC) has the highest energy conversion efficiency in theory at present. It uses solid oxide as electrolyte material, can work at 400~1000 ℃ high temperature, and can use heat to conduct electro-hydrogen conversion. It has the advantages of high energy conversion efficiency and does not need to use noble metal catalysts. It is also expected to become the development direction of future technology. It is expected to be gradually applied to large-scale renewable energy hydrogen production after 2030.
| Clear cost reduction path for "green hydrogen" production
Under the current technical conditions, the cost of hydrogen production from electrolytic water is relatively high, mainly including electricity cost, equipment depreciation cost, labor cost, etc. With the progress of technology and automatic production, the equipment cost will gradually decline; The way to increase the service life of the equipment and thus the hydrogen production can also dilute the depreciation cost and other fixed expenses of the equipment. In addition, the electricity price, which accounts for a higher proportion of the cost of electrolytic water, will continue to decline with the development of renewable energy such as photovoltaic and wind power.
In 2021, after the "double carbon" goal was put forward, the planning and promotion of domestic electrolytic water hydrogen production project gradually accelerated. At present, the main route of hydrogen production from electrolytic water in China is alkaline electrolytic cell. The main reason is that the technical
of alkaline electrolytic cell is mature and the cost has significant advantages. Due to the high cost of PEM electrolyzer, commercial promotion still needs time, and from the current domestic business model, the technical advantages of PEM electrolyzer are not obvious.
In terms of domestic project planning, the downstream applications of green hydrogen mainly include chemical industry, fuel cell vehicles, cogeneration and other energy storage fields. From the perspective of economy and current market scale, chemical raw materials are the most important way to use green hydrogen. This is because: first, the production of green hydrogen is mostly carried out in chemical parks. At the level of safety supervision, hydrogen has been managed as a dangerous chemical for a long time in history. Therefore, hydrogen production in most provinces can only be carried out in the chemical industry park. The hydrogen produced can be directly provided to the chemical enterprises in the park for use, reducing the transportation cost and maximizing the economy. Secondly, the demand for chemical hydrogen is large and the business model is stable. Traditionally, some chemical production lines need hydrogenation. Previously, hydrogen from fossil fuels was used as hydrogen source. Replacing with green hydrogen can help reduce carbon in chemical production process without additional conversion process, so there is a stable market demand. At present, the economy and business model of the application of green hydrogen in other fields are still in the process of exploration.
It is expected that the green hydrogen project will gradually expand from a demonstration project to a commercial one under the promotion of the policy in 2023. Under the carbon reduction scenario of the "double carbon" target, green hydrogen has rich application scenarios. On the one hand, it can cooperate with new energy power stations to play the role of hydrogen energy storage. On the other hand, in the industrial field, hydrogen energy can also be used as a tool for reducing carbon. The "Fourteenth Five-Year Plan for Industrial Green Development" issued by the Ministry of Industry and Information Technology clearly mentions the promotion of basic research on new pollutant treatment technologies and equipment such as "green hydrogen development and utilization" and the promotion of "green and low-carbon technologies such as green hydrogen refining" in the refining and chemical industry.
It is expected that with the continuous reduction of green hydrogen cost and the continuous increase of supply, the demand for green hydrogen will expand significantly in 2023, with the main increase coming from the carbon reduction demonstration projects of chemical enterprises and large state-owned enterprises in the industrial field. The increase of green hydrogen projects is expected to directly drive the purchase demand for electrolytic cells. We predict that the demand for electrolytic cells is expected to reach the scale of 3GW in 2023, with a corresponding market space of 5 to 6 billion yuan, and is expected to become the second largest hydrogen energy sub-industry besides FCEV.
