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Hydrogen as the Facilitator for China’s Energy Challenge

An IHS Markit study considering the potential role of hydrogen in China

China has proposed an increase to a 35% renewable energy target by 2030. The country is looking to move away from its reliance on domestic coal and imported oil and gas, as well as to combat extensive emissions and pollution. IHS Markit is exploring the feasibility of hydrogen to help China meet its goals.

Hydrogen deployment is consistent with many of China’s long-term goals to reduce carbon emissions and to improve air quality. An alternative to imported natural gas, hydrogen can be used across all end-use sectors, including transportation, heat, power generation, and industrial applications. Power to gas (electrolysis) or gasification technologies could be options for China to expand hydrogen production for energy use. Nevertheless, because the greatest potential for large-scale hydrogen production is far from major demand centers, any large-scale adoption of hydrogen would require the development of hydrogen transmission infrastructure.

IHS Markit has launched a multiclient study to explore hydrogen’s potential in China’s future energy mix. The study examines technology options for producing hydrogen, practical issues for the fuel’s rollout, “tipping points” that could launch hydrogen as a major fuel contender, and cost considerations.

Download China Hydrogen Study: Context

Download China Hydrogen Study: Table of Contents

Webinar: Hydrogen as the Facilitator for China’s Energy Challenge

Why Hydrogen in China?

  • Hydrogen deployment is consistent with many of China’s long-term goals
    • Reduce carbon emissions
    • Improve air quality
    • Increase renewable deployment
    • Decrease oil and gas dependency
    • Lessen raw material imports for batteries
  • Transport – Sector analysis for use in road transport
    • Can hydrogen vehicles compete in any part of the transport sector with other technologies?
  • Hydrogen multiple applications across the economy, including transport, industry, heat, power
  • Hydrogen can help integrate intermittent renewables
  • Hydrogen has the ability to balance the power system
  • Hydrogen is a fuel option for a zero-carbon future
Key Questions:
  • Supply
    • How competitive is hydrogen with alternative fuels?
    • How much curtailed electricity is there and will it grow in the future with renewable capacity additions?
    • Could hydrogen allow for a reduction in imported fuels?
  • Demand
    • Which are the most prospective end-use sectors for hydrogen use?
    • With the addition of substantial new renewable capacity, how can hydrogen help to balance the power system?

Research topic areas

Production and transport of hydrogen
  • Hydrogen production supply costs – Creation of a levelized cost of hydrogen model for the following sources:
    • Electrolyser – Curtailed electricity/dedicated generation capacity/grid power
    • Gasification – Biomass/coal/waste
    • Reforming of natural gas
  • Technology developments – Focus on electrolysers
  • Example cost calculations – Producing hydrogen at distant rural locations and transporting to a demand center
  • Cost comparison of hydrogen to natural gas and other energy sources
End-use sector analysis
  • Heating sector – Is there an opportunity for hydrogen to be the energy source in CHP?
  • Transport – Sector analysis for use in road transport
    • Can hydrogen vehicles compete in any part of the transport sector with other technologies?
  • Power sector analysis
    • Use of curtailment – Power that is produced for which there is no demand
    • Balancing power system – How can hydrogen play a role?
  • Global developments – What is happening in other regions that could apply to China?

Study Deliverables

Understanding the technical and policy issues impacting the potential role of hydrogen in power, industry, transport and heat in China

Tipping Points
Determining the triggers and conditions required for hydrogen to be used more widely 

Quantifying indicative costs needed to move hydrogen from demonstration to commercial success in each principal end use

Market potential for hydrogen
Indicative calculation of the potential demand for hydrogen in China if it is economic

“Hydrogen as the Facilitator: Meeting China’s Energy Challenge” Study Timeline

  • Study Kickoff – February 2019
  • Intermediate Workshop and Presentation Materials – Beijing, July 18, 2019
    Read an overview
    Download workshop agenda

  • Final Workshop and Presentation Materials Day – Beijing, November 2019

Methodology: Quantitative Analysis

We assess maximum potential scale and volume of hydrogen for 2030, 2040 and 2050, assuming favorable costs and policy support. The hydrogen outlook will be consistent with IHS Markit energy scenarios.

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