New trend of clean energy development: the integrated development of "photovoltaic + hydrogen" industry

Climate change is a major global challenge facing humanity today. Against the backdrop of countries vigorously developing low-carbon green economies, photovoltaics (PV) have entered a new stage of innovative development in terms of technology, cost, and business models, and the trend of cross-industry integration in the PV industry is becoming increasingly apparent. Compared to hydrogen production from fossil fuels, hydrogen recovery from chemical byproducts, and water electrolysis, "PV + hydrogen" has become a typical path for cross-industry integration in PV, as a zero-carbon energy and clean energy storage carrier. It has also created new application scenarios and broad market demand for the PV industry.

The combination of solar photovoltaics and hydrogen will become the ultimate solution for future clean energy.

Hydrogen, as a clean, efficient, and sustainable energy source, is consideredas one ofmost promising clean energyin the 21st century. From the perspective of hydrogen production, photovoltaic hydrogen production can achieve decarbonization at the source, ultimately achieving decarbonization in industrial production. At the same time, hydrogen, as an energy storage medium, has a higher energy density than lithium batteries, making it ideal for long-term energy storage to address issues such as daily and seasonal imbalances encountered in photovoltaic power generation.

Photovoltaic hydrogen production has special advantages in smoothing out the instability of photovoltaic power generation and improving energy storage efficiency, creating new applications and broad market demand for photovoltaic power generation. According to the latest World Energy Outlook released by BP, by 2050, the proportion of hydrogen energy in total final energy consumption may increase by 16%, with water electrolysis becoming the main method of hydrogen production. China is at the forefront of using renewable energy for water electrolysis, and according to a white paper released by the China Hydrogen Alliance, renewable energy electrolysis for hydrogen production will account for 70% of the hydrogen supply structure by 2050.

The cost advantage of photovoltaic power generation has made commercialization a reality.

With a significant reduction in costs, the market value of photovoltaic power generation is gradually becoming apparent, making it the most economical way of power generation in many countries and regions worldwide. It has the potential for large-scale application and gradual replacement of fossil fuels.

In July 2022, the Japanese Ministry of Economy, Trade and Industry analyzed the costs of 15 types of power generation, including nuclear power, photovoltaics, wind power, coal, and liquefied natural gas (LNG). The estimated data showed that the cost of photovoltaic power generation in 2030 would be 8-12 yen per kilowatt-hour, even lower than the cost of nuclear power. This marks the first time that the cost of photovoltaic power generation will be reversed with nuclear power. (The estimates are based on standard costs for building and operating new power plants, excluding costs for connecting to the transmission grid, etc.) According to statistics from the China Photovoltaic Industry Association, from 2011 to 2020, the price of photovoltaic systems dropped by more than 4.3 times, and component prices dropped by more than 5.7 times. In 2021, China has already entered a phase of comprehensive cost parity. In more and more countries and regions, photovoltaic clean energy will become the most competitive electricity product.

The world's winter countries are intensifying their layout to seize the development opportunities of "photovoltaic + hydrogen".

Internationally, countries such as Japan, Europe, and the United States are leading the way in the industrialization of photovoltaic hydrogen production. In December 2017, the Japanese government released the "Basic Hydrogen Strategy," emphasizing the importance of Japan leading the world in realizing a hydrogen-based society and deploying specific policies accordingly. Japan has invested in and built the world's most advanced Fukushima Hydrogen Energy Research Field (FH2R), which is the largest renewable energy hydrogen production plant in the world, covering an area of 220,000 square meters, including an 180,000 square meter photovoltaic field and a 40,000 square meter research and hydrogen production facility. The project is equipped with a 20MW photovoltaic power generation system and a 10MW electrolysis tank, capable of producing up to 1,200 standard cubic meters of hydrogen per hour (at rated power). The hydrogen produced will power stationary hydrogen fuel cell systems, as well as fuel cell cars and buses, among other applications.

In October 2020, the European Commission released the "EU Hydrogen Strategy" and the "EU Strategy for Energy System Integration," planning to invest billions of euros into the hydrogen industry over the next decade to stimulate green recovery and strengthen the EU's leadership in clean energy technology. Germany also passed the "National Hydrogen Strategy" to enhance Germany's industrial competitiveness by promoting innovative hydrogen technology research and development, and become a global leader in hydrogen energy. According to media statistics, most of the 13 largest green hydrogen energy projects being developed worldwide, with a total investment of over $100 billion and a total capacity of a staggering 61 GW, are based on photovoltaic hydrogen production, and the projects are mainly located in countries such as Australia, the EU, and the Americas.

China is actively promoting the layout of the "photovoltaic + hydrogen" industrial chain.

In December 2020, the State Council released the White Paper on "China's Energy Development in the New Era," aiming to accelerate the development of hydrogen energy industry chain technologies, such as green hydrogen production, storage, transportation, and utilization, and promote the development of the hydrogen fuel cell technology chain and the hydrogen fuel cell vehicle industry chain. The National Development and Reform Commission (NDRC) issued the "Notice on Guiding and Increasing Financial Support to Promote the Healthy and Orderly Development of Wind Power, Photovoltaic Power Generation, and Other Industries," and the "Notice on Matters Related to the 2021 New Energy Grid-Connected Electricity Price Policy," supporting the healthy and orderly development of the photovoltaic industry.

Many provinces in China have already included hydrogen energy in their "14th Five-Year Plan". More than 20 provinces and cities, including Zhejiang, Guangdong, Hebei, Shandong, Tianjin, and Chongqing, have introduced policies to support the hydrogen energy industry. Attracted by the market prospects, many companies, including Sinopec, Longi Green Energy, Suntech Power, and Baofeng Energy, are actively deploying the photovoltaic hydrogen production market. For example, Longi Green Energy, the world's largest silicon wafer manufacturer and PV module supplier, has established a hydrogen energy technology company, betting on the development of photovoltaic hydrogen production industry. At the same time, it cooperates with Tongji University to jointly build a hydrogen energy joint laboratory, and conducts in-depth cooperation in green hydrogen technology research and development, talent cultivation, and the transformation of research results into productivity, to promote the "photovoltaic + hydrogen" model. At present, there are nearly 40 green gas projects in China, mostly concentrated in the northwest and north China regions, such as the liquid solar fuel synthesis demonstration project in Lanzhou New Area, Gansu Province, the 6MW photovoltaic on-site hydrogen production technology demonstration project of China Datang in Datong, Shanxi Province, and the Sunlight Energy photovoltaic hydrogen production project in Yuncheng, Shanxi Province.

Shanghai is one of the earliest regions in China to launch the photovoltaic industry. It has prestigious institutions such as Shanghai Jiao Tong University, Fudan University, Shanghai Institute of Technical Physics of Chinese Academy of Sciences, and Shanghai Institute of Optics and Fine Mechanics of Chinese Academy of Sciences that have been engaged in photovoltaic research since its inception. Shanghai has an industrial foundation in raw materials and devices such as polycrystalline silicon, silicon wafers, solar cells, and specialized equipment, as well as photovoltaic balance components and supporting auxiliary materials. Shanghai's integration level in the photovoltaic power plant construction, operation and investment management, and the hydrogen fuel cell vehicle industry and other related fields continues to improve. In recent years, the construction of hydrogen energy characteristic industrial parks in Jiading, Qingpu, and Lingang has been accelerated. The Jiading Hydrogen Port has gathered companies such as JHC, Weisi Energy, Shangran Power, Toyota Shanghai Advanced Technology Center, Juechang Instrument, and Shanghai Intelligent New Energy Vehicle Functional Platform. Qingpu district has formulated the "Qingpu Hydrogen and Fuel Cell Industry Plan," while projects such as the Sinopec Hydrogen Energy (Shanghai) headquarters and the Hydrogen Fuel Cell Demonstration Operation will be located in Qingpu Industrial Zone. The Lingang New Area has released the "Three-year Action Plan (2020-2022) for Comprehensive Energy Development in China (Shanghai) Pilot Free Trade Zone Lingang New Area," which will build four oil-hydrogen co-refueling stations, create a hydrogen fuel cell-powered mid-volume bus (T6 line), and plan to layout renewable energy hydrogen production, efficient and low-cost hydrogen transportation and storage, hydrogen refueling station construction, fuel cell cogeneration, and other projects.

According to the "Implementation Plan for Innovative Development of Fuel Cell Vehicle Industry in Shanghai", by 2023, the overall goal of the development of the fuel cell vehicle industry in Shanghai will achieve "100 stations, 100 billion yuan, and 10,000 vehicles". There will be close to 100 hydrogen refueling stations, with over 30 stations in operation. The hydrogen refueling network will be the largest in the country, with an output scale of about 100 billion yuan, ranking among the top in the country's development scale. The promotion of fuel cell vehicles will be close to 10,000 vehicles, leading the country in terms of application scale. The industrial application of "photovoltaics + hydrogen" will lead the industry's transformation and upgrading, promote the high-quality development of the fuel cell vehicle industry in Shanghai, and help Shanghai become a world-class automotive industry center.