Elixir Energy Ltd, an Australian company, is making significant strides in developing Mongolia’s first green hydrogen project called Gobi H2.
The project aims to produce hydrogen from renewable electrical energy sources and transport it to China via pipelines, offering a more energy-efficient alternative to transmitting power for hydrogen production. The company’s partnership with Japan’s SB Energy Corp, now Terras Energy, highlights the strength and potential of the Gobi H2 project. With a pre-feasibility study conducted by AECOM, Elixir Energy is confident in advancing the project and aims to establish a binding joint venture later this year.
The pre-feasibility study assessed various configurations involving wind, solar, battery storage, and a grid connection to support a 10 MW electrolyzer situated near Terras Energy’s existing wind farm in the South Gobi region. The strategic location of the Gobi H2 project provides convenient access to China’s rapidly expanding hydrogen markets.
Elixir Energy commissioned a market study on hydrogen in China from global energy consultants Rystad Energy, which emphasized the potential for imports from production sites like Gobi H2 due to the projected scale of hydrogen demand. Furthermore, the emergence of regional hydrogen infrastructure, such as Sinopec’s hydrogen pipeline in Inner Mongolia, enhances the viability of the project.
One key advantage of pipeline transportation is its cost-effectiveness compared to shipping hydrogen by boat. The cost of renewable energy accounts for around two-thirds of the total cost of green hydrogen production. The Gobi H2 project boasts an impressive combined renewable energy capacity factor, surpassing other world-class locations. Additionally, pipeline access to markets offers a substantial advantage over seaborne supplies, allowing Elixir Energy to potentially supply hydrogen from Mongolia to Chinese markets efficiently.
Traditionally, hydrogen has been used in niche markets, primarily in oil refineries, and derived from fossil fuels, leading to significant CO2 emissions. The recent shift towards green and blue hydrogen, with the latter capturing and storing CO2 emissions underground, is driven by the aim to reduce emissions. Green and blue hydrogen must meet specific emissions targets to be recognized as environmentally friendly, and Elixir Energy’s analysis demonstrates that the Gobi H2 project aligns with the green definitions of major global jurisdictions, including China.
Meeting these criteria is crucial for attracting customers and securing project finance support. The Gobi H2 project’s adherence to green standards positions it favorably in the emerging hydrogen market, ensuring its potential to play a significant role in Mongolia’s renewable energy transition and China’s hydrogen economy.