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At the 2024 China International Hydrogen Energy and Fuel Cell Industry Exhibition held recently, Ouyang Minggao, an academician of the Chinese Academy of Sciences and a professor at Tsinghua University, positioned hydrogen energy storage as a "necessity" in the zero-carbon era, and believed that this technical route will become one of the mainstream energy storage methods in the future and an important support for the new power system in the future.
In the past two years, "new energy storage heat" and "hydrogen energy fever" have come one after another, which are not only favored by investors, but also "show their faces" in the 2024 government work report of the State Council, and policies, capital, attention and even controversy have risen. As a fusion of the two "upstart" concepts, hydrogen energy storage can be described as "stacked with buffs", and has become the focus of discussion in the demonstration stage, and is regarded by many practitioners and scholars as one of the cornerstones of a zero-carbon future.
However, compared with the "shouting", hydrogen energy storage still does not show obvious advantages in technology, cost and business model.
How to solve the "time bottleneck" of new energy storage?
The increasing interest in hydrogen energy storage is not only due to the recent rapid development of new energy storage and hydrogen energy, but also related to the current energy storage pattern, bottlenecks and controversies.
According to the white paper, by the end of 2023, the cumulative installed capacity of electric energy storage projects in operation in the world is 289.2GW, of which the cumulative installed capacity of traditional pumped storage still accounts for 67%, but with the development of new energy storage, the weight has shrunk significantly in the past two years, and it will decrease by 12.3% year-on-year in 2023; The cumulative installed capacity of new energy storage has reached 91.3GW, nearly twice that of the same period in 2022, of which 96.9% is lithium battery energy storage, with an annual growth rate of more than 100%.
Looking at the mainland, the pattern is similar. By the end of 2023, the cumulative installed capacity of electric energy storage projects in operation in mainland China has reached 86.5GW, close to 1/3 of the total scale of the global market, and among different energy storage methods, traditional pumped storage accounts for 59.4%, molten salt heat storage accounts for 0.7%, and new energy storage accounts for 39.9%, with a cumulative installed capacity of 34.5GW, and 21.5GW of new installed capacity in 2023 alone, with a year-on-year growth rate of 166%. Among the many technical routes of new energy storage, lithium batteries are still dominant, accounting for 97.3%, and among other technologies, lead-acid batteries account for 1.2%, flow batteries and compressed air energy storage account for 0.6%, flywheel energy storage accounts for 0.2%, and supercapacitors account for 0.1%, while technical routes such as hydrogen energy storage that have not yet entered the stage of normalized application account for less than 0.1% in total.
The maturity and commercialization of lithium battery is undoubtedly the biggest driving force for the rapid development of new energy storage, and the lithium battery industry is also one of the emerging industries that the mainland actively lays out and focuses on the development of in the field of new energy. However, considering the characteristics of lithium ion itself and the requirements of the new power system for energy storage time, the lithium battery technology route will inevitably encounter bottlenecks in further development.
Huang Zhiguo, deputy director of the comprehensive energy double carbon center of CRRC Zhuzhou Electric Locomotive Research Institute, once said that the comfort zone of lithium battery energy storage is 1-4 hours, and the current average energy storage time is about 2 hours, which is only one-third of the traditional pumped storage. Therefore, Huang Zhiguo suggested promoting the diversified layout and development of the new energy storage industry, and strengthening the research on energy storage application products of different durations and types, such as flow batteries suitable for medium and long-term energy storage scenarios of more than 4 hours, compressed air energy storage that can be stored for more than 10 hours by increasing the capacity of the gas storage chamber, and hydrogen energy storage that can achieve cross-seasonal energy storage.
At the 12th Energy Storage International Summit and Exhibition (ESIE 2024), which opened on April 10, some industry insiders also talked about the time bottleneck of lithium batteries and the homogenization of new energy storage development, and discussed the optimization of the pattern and the prospects of diversified development. According to the statistics of Zhang Peng, director of the Energy Transition Center of Great Wall Securities, in 2023, there will be 19 flow battery projects and 18 compressed air energy storage projects that will start construction or have carried out preliminary work in the mainland, and more than 100 companies have participated in long-term energy storage projects, and about 20 companies have been invested, with a total investment of nearly 5 billion yuan, a year-on-year increase of 7 times. According to the statistics of ESPLAZA long-term energy storage network, from 2023 to the present, a total of more than 40 companies, including newly registered enterprises, transformation enterprises and business development enterprises, have entered the long-term energy storage track, including subsidiaries of giants such as PetroChina 000035 and Sinopec. SZ), Xu Ji Electric (000400. SZ) and other A-share listed companies have also announced their plans or progress for long-term energy storage projects.
However, other energy storage methods that seem to have their own strengths in technology are still difficult to quickly "take a piece of the pie" in the market or even counterattack lithium battery in the short term, and the core problem is still the slow progress of commercialization and scale caused by poor revenue models. According to Caixin, Hui Dong, chief technical expert of China Electric Power Research Institute, said at the press conference of CATL (300750.SZ) Tianheng lithium iron phosphate battery energy storage system on April 9 that although there are still some problems in the duration, life and safety of lithium-ion battery energy storage, compared with other new energy storage technology routes, its profit prospects are still the most impressive, and the commercialization progress is also the most mature, and it is expected that the industry will still show a pattern of "one lithium dominance" for a long time. According to the forecast of Great Wall Securities, the demand for long-term energy storage in mainland China may not usher in a concentrated release until 2027.
What are the advantages of hydrogen energy storage?
Although there is still a long way to go from large-scale development and market outbreak, for the industry, whether it is the policy side, the R&D side or the enterprise side, the battlefield is at present and in the future.
Since late February this year, with the Inner Mongolia Autonomous Region's "Notice on Accelerating the Development of the Hydrogen Energy Industry" and Shandong Province's "Notice on Temporarily Exempting Hydrogen Energy Vehicles from Highway Tolls" and other policies have been introduced, the popularity of hydrogen energy has risen suddenly, and there is a 000723 trend of "breaking the circle". SZ), Quanchai Power (600218. SH) and many other hydrogen energy stocks have stepped out of the price limit, and in the brokerage research report, the title of "new quality productivity C" and the expectation of exceeding the trillion scale in 2025 are quite attractive.
It is also in this wave of heat that hydrogen energy storage, as one of the application scenarios of hydrogen, has received much more attention than in the past. As mentioned above, Ouyang Minggao, Huang Zhiguo and other experts and practitioners have given their own understandings and observations on the characteristics and prospects of this technical route on many occasions, including the recent ESIE 2024.
In general, the advantages of hydrogen as a power storage medium for long-term and cross-seasonal energy storage have been mentioned the most, which is also one of the necessary conditions for the new power system that the mainland is stepping up to build. According to Ouyang Minggao's introduction, energy storage can be divided into long-term, medium-cycle, and short-cycle according to the time cycle, and can be divided into large-scale, medium-scale, and small-scale according to the scale, and short-term energy storage within 10 hours can rely on electrochemical technology routes, but in long-term large-scale scenarios, the advantages of hydrogen energy storage far exceed electrochemistry, compressed air, pumped storage, etc., and it is the most promising solution at present. As a practitioner, Gao Dingyun, chairman of Shunhua New Energy, also mentioned that the biggest advantage of hydrogen lies in energy storage, especially the ability to achieve long-term, cross-space, and large-scale energy storage. The International Energy Agency (IEA) has predicted in a study that at least 10% of renewable energy in the future will have to rely on long-term energy storage technology to participate in the power system to reach net-zero targets. Ouyang Minggao also gave an estimate that the mainland needs 1.5 trillion kilowatt-hours of long-term energy storage by 2060, accounting for 9% of the electricity consumption of the whole society, and hydrogen energy storage will play an important role in it.
Marco Alvera, co-founder and CEO of hydrogen energy company Tree Energy Solutions (TES) and independent director of S&P Global (SPGI), has detailed the scenarios and comparative advantages of hydrogen as an energy storage solution for power systems in his book "The Hydrogen Revolution: A Blueprint for the Future of Clean Energy": Seasonal fluctuations, etc., the power system of the future will convert a portion of renewable energy into green hydrogen during the peak season, transmit it through the grid, and use it for power plant combustion in the off-season, or use grid-scale fuel cells to generate electricity. In this process, close to 40% of the electricity may be lost, but hydrogen energy storage still has a cost advantage over energy storage methods such as electrochemistry on a long-term scale. Specifically, if measured on a daily basis, the cost of hydrogen energy storage is 1/4 higher than that of battery storage, but if measured on a weekly basis, the cost of battery storage will soar from $120/MWh to $700/MWh, and its total cost will be nearly 1.5 times higher than that of hydrogen energy storage. In this way, Marc Alvera envisions that the future of domestic, industrial and commercial energy will be equipped with dual-fuel systems, which will be connected and converted to the power grid, hydrogen grid, and reversible electrolyzers or fuel cells respectively to meet the needs of different use scenarios.
For now, at least some of these ideas are slowly becoming a reality, with European gas giant Snam working with Microsoft, Cisco, Accenture and others to develop intelligent systems for grid and hydrogen grid connections. In mainland China, the National Development and Reform Commission has issued a policy to encourage hydrogen fuel in thermal power plants, aiming to gradually transform some high-carbon coal-fired power generation into hydrogen-fired power generation that does not emit pollutants, and has also emphasized the development of "wind and solar power generation + hydrogen energy storage" integrated application in the medium and long-term planning of the industry. In February 2023, the first domestic HA-class heavy-duty gas turbine in mainland China officially rolled off the assembly line, and the comprehensive energy station of Daya Bay Petrochemical Zone in Huizhou, Guangdong, which uses the product, has become the first HA-class gas turbine in China with hydrogen-doped combustion, and the project plans to achieve 100% hydrogen combustion in HA-class gas turbines around 2030. In the "List of Green and Low-Carbon Advanced Technology Demonstration Projects (First Batch)", which was publicly solicited by the National Development and Reform Commission in mid-March this year, there are also relevant application projects such as the "Electricity-Hydrogen-Electricity" new model demonstration project based on pure hydrogen gas turbine innovation by Beijing Chong Ignite Energy Technology Development Co., Ltd. and Inner Mongolia Huomei Hongjun Aluminum and Power Co., Ltd.
Focusing on the subdivision of hydrogen energy storage, the mainland has put into operation three hydrogen energy storage projects, namely the first megawatt-level hydrogen energy comprehensive utilization demonstration station in Lu'an, Anhui Province, the Dachen Island hydrogen energy comprehensive utilization demonstration project in Taizhou, Zhejiang, and the first solid-state hydrogen storage project in China Southern Power Grid, which were built and operated by the State Grid. In September last year, the new energy storage demonstration project of hydrogen energy storage peaking power station invested and constructed by Yuanwang-Load-Storage New Energy Technology (Shanghai) Co., Ltd. started construction in Karamay City, Xinjiang, which is committed to "building a hydrogen capital in the west", with a total investment of 35 billion yuan, and is scheduled to be completed in August 2024, when it will become the largest hydrogen energy storage project in mainland China. It is understood that the project will use the electricity generated by photovoltaic power to produce hydrogen by electrolysis of water during the day, and convert the electricity into hydrogen energy for storage, and feed back to the power grid system when the power supply is insufficient at night. This demonstration project will mainly supply power to the Karamay Cloud Computing Industrial Park in the Karamay sub-district to build the first pure green electricity zero-carbon data center in Xinjiang, and in the Baijiantan District, it will be used for combined heat and power, which can provide nearly 480,000 gigajoules of zero-carbon heat source services and achieve zero-carbon heating of 480,000 square meters, which is an important part of the Karamay zero-carbon city plan. In addition, seven industrial chain supporting enterprises, including Turbo, Luanniao Electric, and Kaihaoda, have also landed in the radiation area of the demonstration project, forming a hydrogen energy equipment manufacturing base. According to the titanium media APP, Tibet Autonomous Region, Huzhou, Zhejiang, Zhangjiakou, Hebei and other places currently have hydrogen energy storage project planning. In addition to large central state-owned enterprises in the field of power grid and power generation, hydrogen energy companies such as Kunhua Technology and Gaocheng Green Energy, Sungrow Power Supply (300274. SZ), Chint New Energy and others also have a layout in the field of hydrogen energy storage. TÜV Rheinland conducted a survey of Chinese energy storage practitioners in 2023, and the results showed that as many as 46.9% of respondents believe that hydrogen energy will be most closely integrated with energy storage in the next three years, ranking second only to solar energy, an increase of 24.5% compared with the same survey in 2022.
From the development of the above-mentioned demonstration projects, the evolution of the participants and the attitudes of practitioners, it can be seen that the scale, application scenarios, construction and operation enterprises of hydrogen energy storage have gradually expanded. The trend of gradual diversification, but in general, it is still in the stage of small-scale scientific research demonstration projects, and there are still many difficulties in realizing commercialization. The power generation scheme still needs to be more verified, and the third is that the positioning in commercialization is not clear, although the model is relatively flexible and rich, but the balance and trade-off of different applications and technology directions have not yet been explored to find the most economical profit plan.
Can the "CP" of electricity and hydrogen group achieve a zero-carbon future?
Whether it is hydrogen energy storage, which is expected to "show its strength" in the power sector, or other application scenarios of hydrogen energy (especially green hydrogen produced through renewable energy), there is still a certain distance from commercialization and large-scale development. However, even as the goal of carbon neutrality is getting closer, hydrogen energy, which is slower to commercialize, has become one of the most prominent future industries, and many believe that the combination of hydrogen energy and renewable energy such as wind power and photovoltaic power generation will be the best solution to achieve and sustain a zero-carbon world.
Specifically, one is the time dimension, wind power and photovoltaic as a power source have intermittent and fluctuating problems, especially between day and night, and there is a huge gap between the four seasons, which requires the storage of electric energy to stabilize volatility and ensure stable supply. For example, the Middle East, Africa, Australia and other places are rich in wind and solar resources, but Japan, South Korea and some countries in Europe, especially Western Europe, are dwarfed. In this regard, hydrogen energy, which has a small long-distance transportation loss and a certain advantage in transportation cost (hydrogen energy can be greatly reduced by transforming the existing natural gas website), is also a high-profile energy transmission solution.
More critically, in the carbon dioxide emission structure, although electricity "contributes" the most to carbon emissions, it only accounts for about 40%, transportation is about 20%, no matter how clean electricity develops, at least one-third of the scenarios cannot be covered by electrification, including long-distance transportation and heavy industries such as steelmaking and chemicals (industrial carbon emissions account for more than 20%), as well as some construction and agricultural scenarios. For these "households with difficulty in reducing emissions", hydrogen energy that can be commercialized and scaled up has the potential to play a "wall breaker".
In the industrial field, hydrogen can be used as a fuel in steelmaking, oil refining, manufacturing green plastics, low-carbon concrete and other scenarios, in fact, the application of hydrogen energy in the industrial field has a certain scale, but due to cost, efficiency and other considerations, the use of green hydrogen is often not made from renewable energy, which greatly reduces the cleanliness. How to accelerate the commercialization of green hydrogen and apply it to industrial decarbonization has also become one of the key issues of carbon neutrality that has attracted much attention.
In the field of transportation, power batteries have obvious advantages in terms of conversion rate and cost, and have gradually carried out "new and old replacement" of fuel vehicles in urban transportation and household scenarios, but in long-distance commercial scenarios such as freight, the excessive weight of power batteries will bring pressure to battery life and transportation costs, and "light" In addition, the theoretical energy replenishment efficiency of hydrogen energy is higher than the current charging efficiency of electric vehicles, if the development of super fast charging and battery swapping mode is not as expected, some commercial vehicles that need frequent energy replenishment, such as taxis and buses, may also choose hydrogen energy. In the "Medium and Long-term Plan for the Development of Hydrogen Energy Industry (2021-2035)" jointly issued by the National Development and Reform Commission and the National Energy Administration in March 2022, it was proposed that the goal of about 50,000 hydrogen fuel cell vehicles by 2025 is still more than 30% short of reaching the standard, but the production and sales of hydrogen fuel cell vehicles in the mainland have nearly doubled in the past two years. In addition, in the field of intercity public transportation, shipping, aviation, hydrogen energy is also pinned on high hopes, on March 21 this year, by the CRRC Changqing Co., Ltd. independently developed the mainland's first hydrogen energy city train, in Changchun successfully completed a full load operation test of 160 kilometers per hour, marking a new breakthrough in the application of hydrogen energy in the field of mainland rail transit; In the field of aviation, there are also many research and tests on hydrogen aircraft (including hydrogen fuel cells, hydrogen-fired flights, and pure liquid hydrogen flights) around the world.
In the field of heating, hydrogen is also considered to be a technology that can inherit the "legacy" such as natural gas pipelines and replace natural gas as the mainstream heating solution. However, the flammability and leakage of hydrogen energy have led to doubts about its safety, and greater breakthroughs are still needed to avoid accidents if it is to be applied to home heating scenarios.
Even in the field of artificial intelligence, which occupies the "C position" in the changing times, hydrogen energy also has a place. According to Mark Alvera's book mentioned above, 45% of data centers in the United States will use hydrogen energy storage to support the operation and development of artificial intelligence, and by 2050, it is expected that as many as two-thirds of data centers will be equipped with hydrogen energy storage.
In summary, in most scenarios of human activities and social operation in the future, we will coexist with hydrogen. According to the forecast of the China Hydrogen Energy Alliance, by 2060, hydrogen energy application scenarios will be concentrated in four major fields: industry, transportation, electric power, and construction, of which construction accounts for about 4% (combined heat and power, combined heat and power), electricity accounts for about 5%, transportation accounts for about 31%, and industrial applications account for 60%.
However, when communicating with a practitioner engaged in the operation, maintenance, and safety supervision of hydrogen energy systems, the other party said that although the popularity of hydrogen energy has been very high recently, the progress of technology and commercialization has been a little slow, and the influx of funds may not be used for bottlenecks, but may join the trend of homogeneous capacity expansion. In the research article a year ago, the output and performance of the core components of the industry are relatively weak, the storage and transportation costs remain high, and there are potential safety hazards and other common problems of the industry (hydrogen energy is accelerated: the industry is multi-frequency resonant, ready to meet fission), and so far has not been substantially solved. Seeing that the expected 2025 "trillion-scale year" is getting closer and closer, when this technology, which carries the vision of a zero-carbon future, will be able to step into the taxiway before take-off is still exciting for practitioners and investors. (This article was first published on Titanium Media APP, author|Hu Jiameng, editor|Liu Yangxue)
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