With the development of technology, hydrogen energy, as a new energy source, is getting closer to the daily life of the people. A complete hydrogen energy industrial chain integrating manufacturing, R&D, storage, transportation, application and consumption has been formed. So far, more than 40 local governments in China have issued policies to support the development of the hydrogen energy industry.
With the breakthrough of technology, the hydrogen energy industry is about to usher in a new development trend. Hydrogen energy has huge development spaces, from transportation to power generation to home application. It is expected that by 2050, hydrogen energy can meet 18% of global energy demand or 12% of global primary energy demand, and the market size of hydrogen energy and hydrogen energy technology will exceed US$2.5 trillion.
The hydrogen energy industry is in the eye of the storm and will meet opportunities in 10 to 15 years
The hydrogen energy industry has been enjoying development opportunities recently in China, mainly because of: 1) the significant drop of the cost of hydrogen production, especially when the advancement of hydrogen purification technology for chemical by-products has provided a large-scale material basis for the development of the hydrogen energy industry; and 2) the rapid progress of hydrogen fuel cell vehicles, which has made it clear that hydrogen energy has huge development room in the transportation field.
In the context of low-carbon development and energy transformation, the hydrogen energy industry has achieved bottom-up development, namely the industry, local governments and secondary markets become very active, which is the biggest factor driving the rapid development of the hydrogen energy industry. However, there are still constraints from the local governments. On the one hand, some local governments blindly deploy the hydrogen energy industry, leaving certain safety risks in the future; on the other hand, hydrogen energy requires a large amount of local government financial subsidies in the short and medium term, hence it is not possible to develop large-scale hydrogen energy industry in provinces with less developed economy in the short term.
There are still many constraints on the application of hydrogen energy in the transportation field
The reason why hydrogen energy is now in the eye of the storm is due to its application in the transportation field, especially in Japanese and South Korean passenger car market. Toyota and Honda and Hyundai have already achieved large-scale production of their passenger cars.
In the next 5 to 10 years, fuel cell vehicles will show rapid growth globally. The United States, Japan, China and Europe will be the key regions of development of hydrogen fuel cell vehicles. In China, the hydrogen FCV is mainly applied to commercial vehicles, which are mainly used in logistics, public transport and buses.
However, whether hydrogen FCVs can have an explosive growth is decided by following factors: 1) the rate of decline in hydrogen costs. At present, the hydrogen market price is RMB70/kg in Beijing and its surrounding markets and RMB80-120/kg in Yangtze River Delta and Pearl River Delta. Taking buses in Beijing for example. The hydrogen energy consumption is 8 kg per 100 kilometers, not able to compete with gasoline and diesel at all; 2) whether the subsidy policy can continue. For now, hydrogen fuel cell vehicles have high financial subsidies. Generally, the subsidies for buses are RMB1 million per 20 000 kilometers. In the hydrogen energy replenishment process, the government subsidies are RMB30 per kilogram in Beijing and its surrounding areas. Whether the above subsidies can continue in the future will directly affect the popularity and application of hydrogen energy vehicles.
The hydrogen refueling station will be constructed on a large scale in the next ten years, and state-owned capitals will become the main investors
The most important link in the development of hydrogen energy vehicles is whether the establishment of hydrogen refueling stations and related infrastructure can be started quickly. By the end of 2019, there were more than 50 hydrogen refueling stations in China, with over 10 more under construction and dozens in the plan. There is a huge room for future development. If the policy support for hydrogen energy persists, the number of hydrogen refueling stations in China may exceed 150 by the end of the "Fourteenth Five-Year Plan" period, and future investment entities will be national enterprises like PetroChina, Sinopec, National Energy, Three Gorges Corporation, etc., supplemented by private sector and joint ventures.
The current investment cost of a 35 MPa hydrogen refueling station is in the band of RMB18-25 million, and government subsidies range from RMB3 million to RMB5 million. Judging from the vehicle situation, almost all domestic hydrogen refueling stations are in loss currently. The oil-hydrogen hybrid stations constructed by traditional oil and gas sales companies of Sinopec and PetroChina will greatly reduce their operating cost. At present, the bundling of hydrogen refueling stations and gas stations is adopted in some regions to encourage the investment in hydrogen refueling stations.
In the FCV industry chain, the localization proportion of major components will increase substantially in the next 5 to 10 years, and the price of FCV will continue to decline.
The cost of fuel cell vehicles is currently high. The price of a fuel cell bus is 2 to 3 times that of a gasoline car of the same type. The main reason is the high price of fuel cells and their core components, which mainly rely on foreign technology. At present, more than 80% of China's stacks use foreign technology, and the technology of major producers Sino Synergy and Weichai Power comes from Canada's Ballard. With the gradual improvement and maturity of domestic independently developed stack technology, the proportion of localization will increase significantly in the future. The cost of fuel cell vehicles is expected to decline further.
On the other hand, the current shipment of fuel cells in China is still small, but the capacity has exceeded dozens of times the demand. In 2019, the output of hydrogen fuel cell vehicles in China was only 3 018, and the overall production capacity of fuel cells has reached as high as 150 000 units per year. Therefore, the fuel cell industry will face more intense competition, and prices will drop significantly.
The application of hydrogen energy in natural gas and other fields will be paid more attention in the future
At present, the application of hydrogen energy is mainly concentrated in the transportation field, like passenger cars, commercial vehicles and hydrogen energy ships. However, the application scenarios of hydrogen energy are very wide, and the hybrid of hydrogen energy and natural gas will have a larger market space in the future.
Natural gas has always been regarded as a clean energy source, but recent research has found that natural gas combustion brings huge nitrogen oxide pollution and is one of the main pollution sources of atmospheric pollutants and climate warming. Adding hydrogen to natural gas can greatly reduce the emission of nitrogen oxides. The addition of 20% hydrogen in CNG vehicles can reduce the emission of nitrogen oxides by 4 times, and the addition of less than 5% hydrogen in natural gas pipelines can also greatly reduce the emission of nitrogen oxides during the combustion process.
