The world’s largest green hydrogen project, with a 150-megawatt alkaline electrolyser, has been fully switched on in northwest China, powered by a 200MW solar array.
Ningxia Baofeng Energy Group, a coal-based chemicals manufacturer, actually completed the project in the autonomous region of Ningxia, central China, shortly before Christmas last year, but seems to have kept the news quiet.
Even oil giant Shell — with its network of analysts and international reach — did not know about it, reporting last week that its forthcoming 20MW electrolyser would only be 10MW smaller than the world’s largest existing green hydrogen project.
According to Xiaoting Wang, Chinese hydrogen specialist at analyst group BloombergNEF, the 150MW Baofeng project was fully operational on 22 December last year.
Its new record will be short-lived, however, as Chinese oil giant Sinopec has begun construction of a 260MW alkaline electrolyser facility in Xinjiang, northwest China, which is due to be completed in mid-2023. That facility will be powered by roughly equal amounts of solar power (from an on-site 300MW array), and nearby wind farms, Xiaoting writes in an analyst note.
The Baofeng project has held the world record for largest operational electrolyser since April last year, when it commissioned the first 30MW. The record had been previously held by Air Liquide’s 20MW Becancour project in Quebec, Canada.
Green credentials in doubt
Despite claiming to be a solar-powered green hydrogen project, the Baofeng facility might also be run using grid electricity when the sun is not shining. The company says it “can now produce” 27,000 tonnes of green hydrogen each year, but according to Xiaoting, that would not even be possible if the electrolyser was operating at maximum capacity for every hour of every day. She calculates that a 150MW machine running around the clock would only produce 23,700 tonnes of hydrogen annually.
Xiaoting also casts doubt on Baofeng’s claim that its green hydrogen costs $1.2 per kilogram, arguing that the real figure would be more than twice as high.
“Baofeng claims its green H2 cost will be $1.2 per kilogram, which is very close to its current cost of production for grey H2 from coal gasification ($1/kg). However, this claim is based on a unique calculation method that is not typical in the industry.
“Baofeng applies linear depreciation to all equipment costs over 25 years, while ignoring cost of capital and system degradation. It also assumes continuous electricity supply without addressing the cost of using grid power. BloombergNEF estimates the actual H2 production cost measured in a levelized metric following industry routine is at least twice Baofeng's statement.”
Baofeng has also revealed plans to build 150MW of electrolysers every year until 2040.
Sinopec expects that its 260MW electrolyser in Xinjiang will deliver an annual yield of 20,000 tonnes of green hydrogen, achieving a utilisation rate of 48.8%, according to BNEF. The resulting greenhydrogen — which will only represents 0.5% of the company’s annual hydrogen yield — will be transported by pipeline for use at a nearby Sinopec oil refinery.
(This article was first published by Upstream's renewable energy sister publication, Recharge, on 1 February, 2022.)