Chinese state-owned oil giant Sinopec has launched its first wind power project as part of an energy transition strategy that includes major green hydrogen ambitions.

The 20 megawatt onshore wind project, located in Dali in China's northwestern Shaanxi province, is being developed by Sinopec Star Co, a clean-energy subsidiary of the national oil company that previously focused only on geothermal development.

The wind milestone comes as Sinopec — the world's third-largest petrochemical producer — embarks on a wider energy transition strategy that promises to accelerate investment into "new energy, new economics, and new industries," including hydrogen, solar, wind and biomass.

Market analysts in China have said Sinopec is especially keen on carving out a leading role in the country's fledgling green hydrogen market.

Last month, two of the group's investment subsidiaries, Sinopec Capital and Enze Private Equity Fund, reached an agreement with US company Cummins to promote its electrolysis technology in China.

As part of the agreement, Sinopec may set up a 50/50 joint venture with Cummins for electrolyser production and sales, Upstream's sister renewable energy publication Recharge understands from a source inside the oil group with knowledge of the matter.

The deal underlines Sinopec's intention to move from grey — or unabated fossil-based — hydrogen production to a green player in the key energy transition fuel, with more wind and solar investments like the Dali project set for the coming years, the source said.

Hydrogen ambition

Sinopec is already a leading hydrogen producer in China, with over three million tonnes of annual production generated as a byproduct from its massive petrochemical facilities.

Since last year, the firm has deployed an aggressive approach to investing in the hydrogen value chain across production, infrastructure and fuel-cell technology development.

For example, Sinopec has laid down a plan to convert many of its 38,000 conventional gas stations into hybrid stations combining hydrogen refuelling and electric vehicle charging services.

The oil major has concluded several high-profile investment deals with key fuel cell technology companies, both Chinese and international.

As well as the recent agreement with Cummins, the company last year signed a contract with Air Liquide of France to set up a hydrogen technology joint venture that will promote green hydrogen and fuel cell vehicles in China.

(This article first appeared in Upstream's sister renewable energy publication Recharge on 11 November, 2020.)