China’s World-Leading Green Hydrogen Project Faces Slow Ramp Up

(Bloomberg) -- The world’s largest green hydrogen project will take nearly two years longer to reach full capacity as its Chinese operator struggles with the technology seen as key to cutting emissions from heavy industry.

China Petroleum & Chemical Corp. said last week that its Kuqa project in Xinjiang province would only reach its full annual capacity of 20,000 tons in the fourth quarter of 2025, after previously saying it expected to hit that rate upon completion. 

The state-owned refiner better known as Sinopec announced a full commissioning pf the project at the end of August, with 260 megawatts of electrolyzers powered by renewable energy producing the carbon-free gas that would be sent to the nearby Tahe oil refinery.

Problems at the project would be a blow to global green hydrogen production, which is expected to rise almost exponentially from just 0.1 million tons in 2023 to 51.2 million tons by 2030, according to BloombergNEF. The gas, which is made using renewable energy such as solar and wind and only produces water and oxygen when burned, is seen as vital in reducing emissions from energy-intensive sectors including oil refining and steel making. 

Sinopec said in a Dec. 25 statement that production started June 30, and that approximately 22 million cubic meters of green hydrogen had been produced by Dec. 21. That’s roughly 2,000 tons for an annual utilization rate of about 20% last year. The company didn’t respond to an emailed request for comment.

BloombergNEF first highlighted problems at the project in late November, when analyst Xiaoting Wang said it was operating at less than one-third of installed capacity because of a wide range of technical problems. 

In its Dec. 25 statement, Sinopec said green hydrogen production would be gradually ramped up as the Tahe refinery completes an expansion project. It also said it had faced problems with electrolyzers not being able to handle the fluctuations in power coming from intermittent renewable sources, but had come up with solutions and greatly improved its operational range.

Longi Green Energy Technology Co., the solar giant that produced some of the electrolyzers for the Kuqa project, defended the low operations rates at the project at a Dec. 22 forum in Beijing, according to a report from business publication Jiemian. Longi President Li Zhenguo said that when power generation is lower than expected — on a cloudy day, for example — it’s best for safety and stable operations to shut down some electrolyzers to ensure others can run at full load. 

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