BRICS+ paves way for China’s clean energy push By the end of 2024, China’s hydrogen electrolyzer manufacturing capacity is expected to reach 40 GW, which significantly exceeds global demand of around 10 GW in 2025, according to a report by China’s Hydrogen Energy Industry Promotion Association. By 2025, China’s excess capacity for electrolyzer manufacturing may exceed 60 GW, the industry association warned. China regards the Middle East as a promising market for green fuel development, according to a survey by the China Hydrogen Alliance. Saudi Arabia has announced a target to have 4 million mt/year of hydrogen production capacity by 2030, while the UAE aims to have a 25% share in the global hydrogen market by 2030. Both have assets in their well-established oil and gas industry that can be retrofitted to produce green fuels. China’s state-owned companies, including Sinopec, PetroChina and CNOOC, have deep relationships with these countries for developing conventional oil and gas projects, which can be leveraged in green fuel projects. It was a group of Chinese companies, including Sinopec and Longi Green Energy Technology, the world’s largest solar PV manufacturer, that launched Dubai’s first hydrogen refueling station during COP28. However, that China’s foray into the Middle East clean energy business is not without challenges. Companies and investors told S&P Global that they are facing a double whammy of significant technical difficulties and low prices. “Building and maintaining a solar PV plant in the desert is never an easy thing,” a solar PV project engineer said. “The equipment needs to resist strong winds and sandstorms.” If the station is to be built in a coastal area, there are problems related to high humidity and salinity, the project engineer added. There are also polarized views about energy transition across the Middle East, given that fossil fuel industries are the pillars of their economic growth, a Chinese fund manager specializing in clean energy investments told S&P Global. China’s solar PV module export market share by region Market share (%) Europe 2022* Asia** North and South America Africa 2023 Oceania 020406080 100 *Market share calculated based on China’s export values to the regions **UAE and Saudi Arabia are considered as Asian markets Source: China Photovoltaic Industry Association China’s solar PV module export volume 250 200 150 100 50 0 2011 2013 2015 2017 2019 2021 2023 (GW) Source: China Chamber of Commerce for Import and Export of Machinery and Electronic Products Hu said that while the region is emerging as a market for China’s clean energy technology, policy uncertainty, counter-party risk to project developments and high cost of capital are key challenges. Go Deeper Energy Transition Services We provide the key data and analysis you need to understand the market today – and the insight and projections you need to reshape the energy landscape of tomorrow. May 2024 Commodity Insights 13
Commodity Insights Conventional and new energy in focus: Page 13
