China’s Sinopec banks on green hydrogen with Xinjiang solar-powered plant

The country’s largest oil refiner says it has started building the world’s largest facility of its kind, with production to start in 2023
The US$470 million project is expected to have an annual output capacity of more than 10,000 tonnes

Energy

Echo Xie

Published: 3:32pm, 1 Dec 2021

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China’s largest oil refiner China Petrochemical Corporation – also known as Sinopec – has started building the world’s largest green hydrogen plant, to be entirely powered by solar energy.

Sinopec said on Tuesday the 3 billion yuan (US$470 million) plant in Kuqa, in the far western region of Xinjiang, was expected to start production in June 2023, with a 20,000 tonnes-per-year capacity.

According to the company, it will be China’s first photovoltaic-powered hydrogen plant with an annual output capacity of more than 10,000 tonnes, as well as the world’s largest.

Hydrogen, a highly reactive gas, has many industrial uses, including as a source of energy. China, which produces the world’s largest amount of it, mainly uses it as an industrial raw material – for example, to manufacture plastics or chemicals.

Most of the country’s hydrogen is produced from fossil fuels, with just 4 per cent coming from renewable sources.

Green hydrogen – produced from renewable sources such as solar and wind energy – has significantly lower carbon emissions than grey hydrogen, which is produced using fossil fuels such as natural gas.

Sinopec’s demonstration project will go through the whole process of green hydrogen production and utilisation, including photovoltaic power generation, transformation, electrolytic hydrogen production, hydrogen storage, transport and refining.

The company will build a solar power station with an installed capacity of 300 megawatts to support hydrogen production. It will also build a hydrogen production plant from water electrolysis, hydrogen storage tanks and a hydrogen pipeline.

The plant will supply Sinopec’s oil refinery in Tahe, Xinjiang, replacing its current natural gas-based hydrogen production, saving an expected 485,000 tonnes of carbon dioxide emissions per year.

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Sinopec chairman Ma Yongsheng said the project would give full play to Xinjiang’s resource advantages and was a key project for the company’s ambitions to be the country’s No 1 hydrogen producer, according to party mouthpiece People’s Daily.

Han Xiaoping, a chief analyst at energy industry website china5e.com, said low land costs and high solar power generation efficiency in Xinjiang would reduce the overall cost of the Sinopec project.

And, while the cost of green hydrogen is relatively high compared to fossil-based hydrogen, intermediate transport costs would be reduced by supplying a local refinery, he said.

“Xinjiang has a strong chemical production capacity … The economics should be relatively acceptable.”

Sinopec is China’s largest hydrogen producer with a capacity of 3.9 million tonnes per year, accounting for 11 per cent of China’s total production. It aims to build 1,000 hydrogen refuelling stations during the 14th five-year plan period to 2025.

The company has three more green hydrogen production projects in the pipeline, including two in the northern region of Inner Mongolia and an offshore wind-based facility in the southeastern province of Fujian.

The adoption of low-carbon hydrogen will play a key role in China’s path towards carbon neutrality. According to a report by the China Hydrogen Alliance in May, the proportion of hydrogen energy in the country’s energy mix is expected to increase from about 3 per cent in 2018 to 20 per cent in 2060.

Already, 23 provinces and municipalities have issued plans and guidelines to develop their hydrogen industry. China is expected to release a mid- and long-term national plan for the sector after discussion, Shanghai Securities News said on Monday.