By 2030, the cost of green hydrogen, which is now $6 per kilogram, is predicted to drop to between $1.40 and $2.30 per kilogram.
This is achievable thanks to China’s commitment to addressing climate change by using a lot of renewable energy. China has made hydrogen a priority. However, coal gasification provides around two-thirds of China’s hydrogen supply, not green hydrogen.
Green hydrogen is now too expensive to bring to market, according to Bank of China’s sustainable finance head Winnie Fan, since prices, infrastructure, and legislative impediments remain a difficulty. After all, according to Fan, the cost reduction of green hydrogen is dependent on technical innovation, such as a sufficient and cost-effective supply of renewable power, as well as storage and transportation technologies. Despite the fact that green hydrogen technology is ready, she remarked at the Asian Financial Forum that “the complete value chain is still growing to commercialize the technology.”
State assistance in the form of favorable regulations and money is required to scale up, according to Shell Hydrogen’s Tobias Chen. “Government subsidies and other types of supply chain assistance will be a strong incentive to speed up the pace of development of the hydrogen sector,” he added. China’s hydrogen output value might exceed 1 trillion yuan by 2025, according to the China Hydrogen Energy and Fuel Cell Industry Alliance. By 2030, the demand for hydrogen will have grown to 35 million tons, accounting for at least 5% of total energy consumption. According to Chen, the current price of $6 might reduce to between $1.40 and $2 by 2030. $30 per kilogram in areas where renewable energy is abundant. By 2032 or 2034, they may merge with other forms of hydrogen, lowering costs compared to gray hydrogen now.
While there are no national regulations for hydrogen, certain provinces, led by Guangdong, Beijing, and Shanghai, have developed their own plans to stimulate local sectors. Sinopec is investing 30 billion yuan in mainland China to create 1,000 hydrogen filling stations by 2025, with a combined annual capacity of 200,000 tons. The hydrogen business is also being targeted by China’s top solar producers. By the end of 2022, LONGi hoped to have built 1.5 gigawatts of electrolyzer producing capacity, up from 500 megawatts in 2021 and 60 percent of new global installations this year.
“In the future, emerging economies with rich renewable resources might serve as a hydrogen production center, where hydrogen can be generated and exported at a low cost,” Chen added. Tobias Chen, speaking at the Asian Financial Forum, stated, “We believe it might become a commercial reality in the next five to 10 years.”