The Hydrogen Economy #60
Hydrogen Momentum: China has Too Much, The West not Enough
Key Points
- As the Chinese economy falters and the leadership pushes for a more ideological set of policies, everything points to huge internal incentives to push renewable power and its energy derivatives – i.e., hydrogen.
- The momentum behind this shift in China is unmatched anywhere else in the world, and it will remain that way – China will keep building and, by doing so, will maintain an unreachable cost lead over all other countries.
- This propels China more quickly towards energy independence but suggests that China will have more than just equipment to sell as low carbon fuels might be welcome in some of the neighboring markets, as may durables.
- In the West we are beginning to see cancellations of projects at a frequency matching new announcements and going forward we will comment on cancellations as an annex to the new projects work – this week Ørsted.
- Grey ammonia markets are precarious as farm economies are very weak, but low natural gas keeps margins attractive, but exposes downside. Further weakness in grey ammonia will complicate blue plans in the US.
Exhibit 1: The low Chinese power costs are green – the other lows are a mix of green and grey – all the averages are mostly grey, but also mostly high capacity-factor – so produce cheaper adjusted unsubsidized hydrogen – except China.
Source: Capital IQ and C-MACC Analysis
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