The news that Sinopec is officially commencing construction on one of the world’s largest green hydrogen projects in Inner Mongolia is slightly contradictory to the real possibility that China might fall prey to its economic strategy, or lack thereof.
The $831 million Ordos project will produce about 30,000 tons of green hydrogen per annum which will primarily be used to displace the coal-based black hydrogen used in nearby chemical plants. Powered by 450MW of wind power and 270MW of solar arrays, the electrolysis plant, which is thought to sit at under 500MW of capacity, will represent the biggest in Sinopec’s arsenal but not the only one under construction. The Kuqa plant, a similar yet smaller 260MW green hydrogen plant powered by 361MW of dedicated solar panels, will cost the petrochemical company $444 million and will produce 20,000 tons of the renewable gas per year.
The Ordos plant will also benefit from a hydrogen storage capacity of 288,000 cubic meters and a pipeline that will deliver the green hydrogen to one of its main customers, the Zhongtian Hechuang Ordos Coal Deep Processing plant, which makes synthetic chemicals. Ma Yongsheng, Sinopec’s chief executive has described the Ordos project as a “demonstration project” that will act as a starting point for a potentially colossal hydrogen supply chain in Inner Mongolia, a region blessed with incredible renewable resources like wind speeds of 9 meters per second and a solar irradiance of up to 1900 kWh/m2.
Sinopec’s aim is to produce more than two million tons of green hydrogen per year from 2025, according to its chief executive, and is reportedly developing a giga-scale electrolysis plant in Ulanqab, also Inner Mongolia.
Among a vast majority of news related to carbon capture projects, bio-fuels and natural gas findings, the two green hydrogen projects stick out in the firm’s portfolio and its flagship renewable ambitions, but the company is also investing in hydrogen infrastructure when it launched China’s first methanol to green hydrogen refueling station in Dalian. The station is capable of producing 1 ton of hydrogen per day with a purity if 99.999%. Sinopec also claims that its station can save more than 20% in associated costs when compared to traditional hydrogen refueling stations.
But China as a whole is nowhere near setting an early pace in the global hydrogen race which will be worth trillions of dollars. With under 5GW of cumulative capacity of electrolysis projects either in the works or agreed on paper before the start of the year, the East Asian giant is not taking advantage of its already established wind and solar leads. But things might be on the up for the East Asian giant because the 5GW figure looks set to double.
A bunch of new hydrogen projects have been announced only in the first two months of 2023 and are all targeting Inner Mongolia:
- Baotou Damao project: 1.8 tons per day green hydrogen and ammonia plant which will cost $1.76 billion and is due to begin operation in 2025
- 15 green hydrogen and ammonia projects with a combined price tag of $7.28 billion in the Xingan county
- Ningxia Baofeng’s 100,000 ton per annum green ammonia plant
- Alshaa’ 140,000 ton per annum green ammonia plant
- Liaoning Taian’s 56,000 ton per annum green hydrogen project.
China employs a strategic system called a “five-year plan” that sets economic targets for its industries once every five years. In the last five-year plan, released in January of 2021, hydrogen was touted as one of the areas of interests which required advancing but that didn’t translate to more than some individual province goals like Beijing’s 200,000 tons per year from 2025 target.
With the next one due at the beginning of 2025, Rethink expects China to push hydrogen even further up its priorities and dramatically scale up its green hydrogen and derivatives industry.