(Bloomberg) — The world’s biggest solar company sees massive demand for panels if China replaces fossil fuel-based hydrogen production with clean energy.
Substituting green hydrogen for just 15% of the country’s current supply of the gas made from coal and natural gas would require 180 gigawatts of solar panels, said Li Zhenguo, chief executive officer of Longi Green Energy Technology Co. That solar capacity would be more than triple what the country added in 2021 in a record year for installations. Li spoke Sunday in the first of a series of webcasts in which the company plans to lay out a vision for a clean energy future.
Longi is the world’s biggest solar module producer, and has invested in manufacturing electrolyzers, a type of equipment needed to produce hydrogen by running an electric current through water. The company plans to triple electrolyzer production capacity by the end of this year from last year.
China uses about 33 million tons of hydrogen a year right now, mostly in industrial and chemical processes. Nearly all is made from fossil fuels. Carving out just 15% for green hydrogen — as producing the fuel from clean energy is known — would require 180 gigawatts of solar panels and 40,000 electrolyzers, Li said.
China should set development targets for green hydrogen, set up pricing policies and provide subsidies to help develop the industry, Li said. He also advocated raising the price of carbon emissions, which would help make green hydrogen more competitive compared to fossil fuel-based supply. Li’s comments came a day after the opening of China’s annual parliamentary session, in which hydrogen was barely mentioned as leaders hammered home the need to secure fuel supplies.
Longi is aiming to control green hydrogen costs at about 16.7 yuan ($2.64) per kilogram, compared to current production costs of 17 yuan a kilogram from natural gas and 10 yuan from coal, Morgan Stanley analysts including Simon Lee said in a research note Wednesday. Further reductions in the price of solar power could dip the cost of green hydrogen as low as 5 yuan a kilogram, according to the bank.