Explainer | Could hydrogen be the answer to China’s energy security problem?
- Hydrogen, the zero-carbon fuel which emits only water when burned, can also be used to store energy for future needs and to meet shortages
- The clean alternative features prominently in China’s 2060 carbon neutrality plan due to its eco-friendly uses and applications and could support its energy security needs
As China’s energy transition gathers pace through the expansion of its renewable energy sources – both wind and solar, authorities are faced with the challenge of storing away the surpluses to integrate their supplies into the country’s gigantic power system and ensure grid stability.
Hydrogen, the zero-carbon fuel which unlike fossil fuels emits only water when burned, has a role to play in power load management because it can be used to store energy for future needs and to meet shortages. It features prominently in China’s 2060 carbon neutrality plan due to its eco-friendly uses and applications and has gained attention due to its potential in supporting China’s energy security needs.
Here is what you need to know about hydrogen energy storage:
What is hydrogen energy storage, and how does it work?
Hydrogen is not just fuel which generates power when burned, but is also a storage device for energy.
When hydrogen is produced by using clean electricity generated from renewable energy sources such as solar and wind power to split water into hydrogen and oxygen using electrolysers, it is called green hydrogen, the cleanest form of hydrogen.
Such a process involves converting electricity into hydrogen, which is similar to battery energy storage, which converts electricity to chemical energy. And this is the origin of the concept of hydrogen energy storage.
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As the world switches to clean power to reduce greenhouse gas emissions and limit global warming, renewable energy is expected to account for a dominant share in the power system. Hydrogen energy storage can be used to facilitate the deployment of intermittent renewable energy sources such as wind and solar, and solve the problem of fluctuations and seasonal variations in power supply.
When renewable energy supply is high but electricity demand is low, the surplus renewable electricity produced can be used to power electrolyser plants to produce green hydrogen. The hydrogen produced can be stored either in gas or liquid form in high-pressure tanks under cryogenic temperatures as a means to hoard clean energy.
When power demand is high and renewable power supplies fall short – such as when the sun sets or the wind speed drops, grid operators can convert the stored hydrogen back to electricity to ensure stable power supply.
What are the benefits of hydrogen energy storage?
Compared with other energy storage devices such as batteries, hydrogen is able to store larger amounts of energy for longer periods without losing power through discharge.
Such efficiency advantage of using hydrogen has great potential in seasonal energy storage as well as in short-term load balancing. For example, hydrogen can be generated during summer when the solar energy is abundant, to be stored for months and used to supply electricity during winter when there’s less sunlight.
In addition, hydrogen energy storage is more cost-efficient than batteries. The hydrogen energy storage cost per Megawatt-hour (MWh) is only 1,300 yuan (US$188), lower than the cost for lithium-ion batteries, which ranges from 1,400 to 1,500 yuan, London-based climate consultancy The Carbon Trust said in a 2021 report.
The cost of expanding hydrogen energy storage is also lower than that of batteries, as it requires only additional storage tanks compared to additional lithium or cobalt mines for batteries. It is superior to batteries, in that it has lower capital energy cost and longer storage period.
What about hydrogen energy storage in China?
China is the world’s largest producer of hydrogen, accounting for about 30 per cent of the global supply. However, green hydrogen accounts for just 1 per cent of the total due to high costs and nascent technologies. The dominant source is hydrogen generated from fossil fuels such as coal and natural gas.
As China targets nationwide net-zero emissions by 2060, Beijing has recognised the important role green hydrogen energy storage could play in this campaign.
Released last March, China’s first-ever national hydrogen strategy – a medium and long-term plan for the development of the hydrogen energy industry between 2021 and 2035 – has included the application of hydrogen in the field of energy storage as one of its four major tasks. The applications should give full play to hydrogen’s potential for long-duration energy storage and facilitate renewable energy consumption and electricity grid balancing, according to the plan.
Several demonstration projects have successfully implemented hydrogen energy storage. In August 2021, the country’s first organic liquid hydrogen storage and hydrogen energy storage laboratory opened in northwestern Shaanxi province followed by China’s first megawatt-level hydrogen storage cogeneration project completing trial operation in eastern Anhui province the following month.
Some leading Chinese companies in the field include water electrolyser suppliers Shenzhen-listed Sunfly Tech, hydrogen project contractor Shaanxi Construction Engineering Group, and Zhuzhou CRRC Times Electric, which offers power supply solutions for green hydrogen production.
Opportunities and challenges
China’s cumulative installed electrolysis capacity could reach 57 gigawatts (GW) by 2030, based on estimates of renewable power generation and demand for hydrogen energy storage, translating to about 2.3 million tonnes of green hydrogen and a market size of over 100 billion yuan, Yao Yao, an analyst at Shanghai-based brokerage firm Sinolink Securities said in a report.
However, challenges such as technological bottlenecks and high costs remain, according to the report. In addition, the current low penetration rate of hydrogen energy also poses risks that demand could remain low in the future.
“The implementation of relevant policies is also not as expected. Detailed regulations are still lacking, and uncertainty in the scale of planned promotion also remains,” Yao said.
