January 5, 2024 [South China Morning Post]- The world’s largest green hydrogen project will take nearly two years longer to reach full capacity as its Chinese operator struggles with the technology seen as important to cutting emissions from heavy industry.
China Petroleum & Chemical said last week that its Kuqa project in Xinjiang province would only reach its full annual capacity of 20,000 tonnes in the fourth quarter of 2025, after previously saying it expected to hit that rate upon completion. At full capacity, the facility’s hydrogen output would eliminate fossil fuel burning equal to 485,000 tonnes of carbon-dioxide emissions per year.
The state-owned refiner, better known as Sinopec, announced a full commissioning of the project at the end of August, with 260 megawatts of electrolysers powered by renewable energy producing the carbon-free gas that would be sent to the nearby Tahe oil refinery.
Problems at the project would be a blow to global green hydrogen production, which is expected to rise almost exponentially from just 0.1 million tonnes in 2023 to 51.2 million tonnes by 2030, according to BloombergNEF. The gas, which is made using renewable energy such as solar and wind and only produces water and oxygen when burned, is seen as vital in reducing emissions from energy-intensive sectors including oil refining and steel making.
Sinopec said in a December 25 statement that production started on June 30, and that around 22 million cubic metres of green hydrogen had been produced by December 21. That is roughly 2,000 tons for an annual utilisation rate of about 20 per cent last year. The company did not respond to an emailed request for comment.
BloombergNEF first highlighted problems at the project in late November, when analyst Xiaoting Wang said it was operating at less than one-third of installed capacity because of a wide range of technical problems.
In its December 25 statement, Sinopec said green hydrogen production would be gradually ramped up as the Tahe refinery completes an expansion project. It also said it had faced problems with electrolysers not being able to handle the fluctuations in power coming from intermittent renewable sources, but had come up with solutions and greatly improved its operational range.
Longi Green Energy Technology, the solar giant that produced some of the electrolysers for the Kuqa project, defended the low operation rates at the project at a December 22 forum in Beijing, according to a report from business publication Jiemian. Longi President Li Zhenguo said that when power generation is lower than expected – on a cloudy day, for example – it is best for safety and stability to shut down some electrolysers to ensure others can run at full load.
Sinopec in September announced plans to become China’s biggest hydrogen producer, putting the country on course to achieve its energy transition and climate goals. The company said it aims to install a capacity to produce 120,000 tonnes of hydrogen a year by the end of 2025.
“The company is targeting to become the largest, technologically leading and best-managed hydrogen company,” in-house website Sinopecnews.com.cn reported. “It will focus on hydrogen refuelling and green hydrogen production to help the transportation sector reduce carbon emissions.”
Growing production and use of green hydrogen is a crucial plank in China’s strategy to wean off fossil fuels and reach carbon neutrality by 2060. China is already the world’s largest hydrogen producer with an annual output of 33 million tonnes.
In March, Beijing introduced the nation’s first hydrogen strategy to develop the industry between 2021 and 2035. Under the plan, China will have at least 50,000 hydrogen fuel-cell electric vehicles on the road and produce 100,000 to 200,000 tonnes of green hydrogen a year by 2025.
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