First, the technical status of the hydrogen production industry
There are many ways to produce hydrogen, and renewable electricity electrolyzed water to produce hydrogen is the ultimate goal under the low-carbon path. According to the different raw materials, hydrogen production is mainly divided into three categories: fossil fuel hydrogen production, industrial by-product hydrogen and electrolyzed water hydrogen production, of which industrial by-product hydrogen is difficult to meet large-scale centralized supply.
There are three major classifications of the technical route of hydrogen production methods
Source: China Hydrogen Energy Alliance, compiled by Huajing Industry Research Institute
For fossil energy and electrolyzed water to produce hydrogen, according to the different carbon emissions, it is divided into three categories: gray hydrogen, blue hydrogen and green hydrogen, of which blue hydrogen reduces the carbon emissions of fossil fuel hydrogen production through CCS (carbon capture) technology, while green hydrogen is prepared by renewable electricity electrolyzed water, which can not only effectively reduce the carbon emissions in the production process, but also renewable raw materials, in line with sustainable development.
Grey hydrogen, blue hydrogen and green hydrogen technology comparison
Source: Collation of publicly available information
From a global perspective, at this stage, hydrogen production is still dominated by fossil energy, and the permeability of electrolyzed water to hydrogen production is low. Natural gas hydrogen production is mainly methane water vapor reforming technology (SMR), which is the world's mainstream hydrogen production method; the mainland is limited by the energy structure of "rich coal and less gas", and the cost of natural gas hydrogen production is high, while the coal chemical hydrogen production technology has been relatively mature, with the advantages of large-scale & low cost, and has been widely used in the mainland. In contrast, the electrolyzed water to hydrogen production is still in the initial stage of development in the world, and the proportion of global and continental electrolyzed water hydrogen production in 2020 is only 2% and 1% respectively, and the growth space is broad.
The proportion of hydrogen production methods in the world, China and the United States in 2020
Note: From the outer ring to the inner circle data are global, Chinese, and American.
Source: U.S. Department ofEnergy, China Coal Industry Association, Huajing Industry Research Institute
Second, electrolyzed water hydrogen production technology and cost structure analysis
The electrolysis water hydrogen production system is composed of an electrolyzer and an auxiliary system (including power conversion, water circulation, gas separation & purification and other modules), of which the electrolytic cell is the core unit of electrolysis of water to hydrogen, and is the value center of the electrolyzed water hydrogen production system. Water electrolysis to hydrogen production means that water molecules are dissociated under the action of direct current to generate oxygen and hydrogen, which are precipitated from the anode and cathode of the electrolytic cell, respectively. According to the different materials of the electrolytic cell diaphragm, the water electrolysis hydrogen production is usually divided into alkaline water electrolysis (AE), proton exchange membrane (PEM) water electrolysis, and high-temperature solid oxide water electrolysis (SOEC).
Comparison of three major electrolyzed water hydrogen production technologies
Source: China Hydrogen Energy Alliance, compiled by Huajing Industry Research Institute
Although the process of electrolysis of water to hydrogen can achieve zero emissions, it is the most expensive way to produce hydrogen at present, and the cost of electricity is the core barrier for large-scale application. Electrolysis of water to hydrogen consumes a lot of electricity, the current source of electricity is still dominated by commercial electricity, in 2020, the cost of electricity in the electrolysis of water to hydrogen accounted for up to 85.3%.
Cost structure division of hydrogen production by electrolyzed water in 2020 (unit: %)
Source: Collation of publicly available information
Related report: "2022-2027 China's Ion Membrane Electrolyzer Industry Market Panor Assessment and Strategic Planning Report" released by Huajing Industry Research Institute
Third, the current situation of the development of the electrolytic cell industry analysis
1. Global market
From the perspective of the global market, the new installed capacity of hydrogen electrolyzers in the world has grown rapidly since 2018, reaching 290.68MW in 2020 and CAGR of 22.3% in 2018-2020.
From 2015 to 2020, the new installed capacity and growth rate of global electrolytic cells
Source: IEA, compiled by Huajing Industrial Research Institute
From the perspective of the distribution of the newly installed structure, at present, the alkaline electrolyzer & proton exchange membrane electrolyzer is the main one in the world, and the total installed capacity of new capacity in 2020 will account for 92% of the world.
Proportion of global electrolyzer installed structure distribution in 2020 (by shipment)
Source: IEA, compiled by Huajing Industrial Research Institute
From the perspective of the distribution of new installed areas of electrolytic cells in the world, Europe is the world's largest installed area, accounting for 40%. The global proportion of the mainland has increased rapidly from 0.95% in 2018 to 8.07% in 2020, which has become one of the important growth points of the global electrolyzer market.
Global electrolyzer installed regional distribution in 2020 (unit: %)
Source: IEA, compiled by Huajing Industrial Research Institute
2. Chinese market
From the perspective of mainland hydrogen production, according to statistics, the mainland hydrogen production in 2020 is 25 million tons, up 13.64% year-on-year, and the average annual compound growth rate is 5.74%.
Hydrogen energy production and growth rate in China from 2012 to 2020
Source: Collation of publicly available information
From the perspective of the new installed capacity of domestic electrolytic cells, after 2018, the development of electrolysis of water to hydrogen in mainland China is faster, and the new installed capacity of electrolytic cells in 2018 is only 1.84MW, and it will reach 23.47MW in 2020.
From 2015 to 2020, China's new installed capacity and growth rate of electrolytic cells
Source: Collation of publicly available information
Fourth, the layout of electrolyzer enterprises
The mainland alkaline electrolyzer has basically realized localization and has an industrial foundation for large-scale promotion. The leading enterprises of domestic alkaline electrolyzers include CSSC 718, Cockley Jingli, Continental Hydrogen Production, Suzhou Jingli, China Huaneng, etc., and the overall technology has approached the international top level. In the field of PEM hydrogen production, the technical level of CSSC 718, Gaocheng Green Energy, Chunhua Hydrogen Energy, Sunshine Power and other enterprises is relatively leading.
From the perspective of enterprise layout, in 2021, LONGi co., Ltd. established LONGi Hydrogen Energy in Xi'an as the headquarters of the electrolyzed water hydrogen production equipment project, and intends to expand the production capacity to 10,000 units in 5-10 years, and build a hydrogen electrolysis water production equipment base in Wuxi. The company expects that by 2022, the production capacity of hydrogen energy equipment will reach 1.5GW; Sungrow signed a strategic cooperation agreement on hydrogen production industrialization with the Chinese Academy of Sciences in 2019, jointly established a joint laboratory for PEM water electrolysis to hydrogen production technology, and launched the country's largest power PEM electrolyzer in 2021M3.
The layout of enterprises related to electrolytic cell equipment in mainland China
Source: Polaris Power News Network, Suzhou Jingli official website, Huajing Industry Research Institute collation
From the perspective of the operating income of the head enterprises, the operating income of Sungrow Power and Baofeng Energy showed a year-on-year increase. According to the announcements of various companies, the total operating income of Sunshine Power in Q1 2022 was 4.568 billion yuan, an increase of 36.48% year-on-year. In Q1 2022, Baofeng Energy's total operating income was 6.515 billion yuan, an increase of 30.83% year-on-year.
2018-2022 Sunshine Power and Baofeng Energy operating income
Source: Announcements of various companies, compiled by Huajing Industry Research Institute
Fifth, the future development prospects of the electrolyzer industry analysis
1. In the short term, the cost of coal & natural gas hydrogen production is low, and it will still be the mainstream technical route of hydrogen production in the mainland. In the chemical industry, most of the hydrogen synthesized from fossil fuels is used as an intermediate for the further synthesis of chemical products such as ammonia and methanol, and the hydrogen production technology route has been very mature and efficient in the mainland, which is the current low-cost hydrogen production method, and has the advantage of large-scale production. In the long run, in order to achieve the goal of carbon peaking in 2030 and carbon neutrality in 2060, "gray hydrogen is not desirable, blue hydrogen is available, and green hydrogen is the main force" is the general direction of hydrogen production and development. According to the China Hydrogen Energy Alliance Research Institute, the proportion of renewable energy electrolyzed water to hydrogen production in mainland China will reach 15%, 45% and 70% respectively in 2030, 2040 and 2050.
2. In the "green hydrogen" mode, new energy power generation such as photovoltaic & wind power is used for electrolysis of water to produce hydrogen, which can achieve zero carbon emissions throughout the closed loop. The rapid development of the photovoltaic and wind power industries in the mainland is expected to accelerate the industrialization process of electrolyzed water to hydrogen. With the emergence of photovoltaic & wind power scale effect, renewable energy electricity costs are expected to decline rapidly; electrolysis systems and photovoltaic, wind energy combined use, easy to achieve distributed hydrogen production, through the rational use of wind & light and other renewable energy curtailment, not only can reduce the cost of electricity, but also effectively solve the problem of renewable energy consumption, to achieve energy storage effect.
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