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The boundaries between power enterprises and chemical enterprises are becoming increasingly blurred. Over the past year, many large power enterprises such as State Power Investment Corporation and China Energy Engineering Corporation have accelerated the progress of chemical projects like green ammonia and green methanol, and a large number of chemical industry practitioners have flocked to "job-hop" to power enterprises. The speed at which power enterprises have entered the emerging field of green chemical engineering and their rapid growth have even surpassed many established chemical enterprises. Electricity and chemical engineering were originally two completely different professional fields. Why has the chemical business become a "hot commodity" in the eyes of power enterprises?

With the cross-industry expansion and increased investment by power enterprises, green hydrogen-based chemical projects have been implemented intensively. In May 2023, the integrated demonstration project of green hydrogen and ammonia synthesis from wind and solar power in Da 'an by State Power Investment Corporation officially broke ground. This project uses wind and solar green electricity as power to electrolyze water to produce green hydrogen, and then synthesizes green ammonia from green hydrogen and nitrogen as raw materials, which is finally loaded onto vehicles for sale. After the project is put into operation, it can produce 180,000 tons of green ammonia annually. This is also the green ammonia project with the fastest construction progress in the country at present.

In September 2023, the construction of the China Energy Engineering Group Songyuan Green Hydrogen-Ammonia-Alcohol Integrated Project, with a total investment of 29.6 billion yuan, began. The project is planned to produce 110,000 tons of green hydrogen and 600,000 tons of green ammonia/alcohol annually. Once completed, it will further promote the large-scale development of green hydrogen-based chemical industry. In March 2024, China Energy Engineering Group's China Power Engineering signed an investment cooperation agreement with the People's Government of Jilin City for an integrated project of green methanol and green aviation kerosene. The company will invest in and build a project with an annual production capacity of 200,000 tons of green methanol and 100,000 tons of green aviation kerosene in Jilin City. In addition, a batch of green hydrogen-ammonia-alcohol integrated projects are planned to be implemented in regions rich in new energy, with the total investment of several projects exceeding 10 billion yuan.

Why do power enterprises take the lead in the green hydrogen-based chemical industry?

It is an essential need for power enterprises to enter the hydrogen-based chemical industry. Under the global backdrop of addressing climate change, new energy sources such as wind and solar power have become the core drivers for the green and low-carbon transformation. At present, China's installed capacity of new energy has ranked first in the world, but it is still far from the goal of carbon neutrality. Compared with the rapid increase in the installed capacity of new energy, the planning and construction of the power grid lags behind. The capacity of future transmission channels is limited, and the regulation capacity of the power system is still lacking. It is difficult to consume more and more incremental green electricity. Large power enterprises are the main force in the development of new energy in China. To maintain a reasonable utilization rate of new energy and increase the return on investment of projects, it is necessary to find ways to convert green electricity. Ammonia alcohol products have a wide range of applications, a huge existing market volume, and a relatively clear business model. The production of green hydrogen from green electricity, followed by the synthesis of green ammonia and green methanol for sale, not only resolves the issue of green electricity consumption but also breaks through the bottleneck of green hydrogen storage and transportation.

Power enterprises have unique advantages in entering the hydrogen-based chemical industry. For a long time, the upstream raw materials of the chemical industry have mainly come from high-carbon fossil energy sources such as oil, natural gas and coal. Power enterprises have no advantages in terms of oil and gas import quotas and coal mine resources, and they also lack technological accumulation in various chemicals, especially fine chemicals. However, green hydrogen-based chemical industry is different. The main raw material source has shifted from fossil energy to green hydrogen. Large power enterprises have a huge installed capacity of new energy and are more familiar with the characteristics of new energy. Electrolyzing water to produce green hydrogen has become a strong point. Moreover, the highly mature technologies and processes for synthesizing ammonia and methanol have removed the entry barriers for power enterprises. In the future, in the field of green hydrogen-based chemical engineering, it's really hard to say which will be more competitive, power enterprises or chemical enterprises.

The market potential of green hydrogen-based chemicals is huge. From the perspective of the international market, on the one hand, the international community has clearly defined green hydrogen-based energy standards, providing a standard guarantee for international hydrogen-based energy transactions. On the other hand, there is an increase in international mandatory policies. For instance, in 2023, the International Maritime Organization set a goal to achieve a zero-carbon shipping fuel usage ratio of 5% to 10% by 2030. Influenced by the above factors, international hydrogen-based energy orders have begun to increase. As of December 2023, the methanol demand corresponding to global methanol ship orders has reached nearly 6 million tons per year. From the perspective of the domestic market, as the national carbon market upgrades and expands, hydrogen-based energy projects are expected to achieve relatively high returns, and some of these returns can offset the cost gap with traditional fossil energy processes. When the National Energy Work Conference was arranging key tasks for 2024, it was proposed to study and explore the technology of co-firing hydrogen and ammonia in thermal power plants, promote the construction of a number of "low-carbon power plants", and also provide a new market for green hydrogen and ammonia products.

From a technical perspective, although certain progress has been made in the production processes of green ammonia and green methanol, there are still problems such as high production costs and low production efficiency, which require further research and development and optimization. The traditional ammonia-alcohol synthesis process has been optimized and iterated in accordance with the stable raw material supply of fossil fuels and the requirements of continuous production. Therefore, it is necessary to enhance the flexibility of the ammonia-alcohol production process to adapt to the volatility of new energy. Only by achieving "load following the source" can the in-depth integration and development of new energy power and chemical industry be realized, promoting the local consumption and high value-added conversion of new energy.

Green hydrogen-based chemical engineering is the inevitable path for high-quality energy development and an important component of the new energy system. In the initial stage of an industry, only by constantly improving production efficiency, optimizing production processes and reducing production costs can the competitiveness of the entire industry be enhanced.