Problems at world’s largest existing green hydrogen project will not be solved until late 2025, Sinopec admits
Chinese oil giant suggests that the electrolysers at the 260MW Kuqa facility in northwest China are only operating at about 20% of capacity
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The Chinese oil giant has also inadvertently pointed out that the facility in the Xinjiang region — the world's largest — is only operating at about 20% of its planned capacity.
This is a major problem when the 260MW of electrolysers are directly powered by 361MW of solar power (and wind energy bought from the grid at added cost), and has resulted in far lower production levels than the 20,000 tonnes of green hydrogen expected annually.
In what has widely been reported in China as a response to BNEF’s findings, Sinopec issued two statements on Christmas Day on the Chinese social network website Weibo, which attempted to change the narrative on the project.
“As of December 21, the project has been operating smoothly for 4,200 hours, with a cumulative 22.36 million cubic metres of green hydrogen transported to the end-user Tahe Refining and Chemical [a Sinopec subsidiary],” the company posted.
Sinopec added: “As the Tahe refining and chemical production unit completes its capacity expansion and transformation, the green hydrogen transportation volume [to the refining site] will gradually increase, and it is expected that by the fourth quarter of 2025, the hydrogen transmission volume will reach 20,000 tonnes/year.”
This statement suggests that it will be more than 18 months before Kuqa’s problems are resolved — making the project’s completion more than two years late — while pinning the blame on the offtaker, Sinopec Tahe.
Indeed, Sinopec is suggesting that its own subsidiary was not prepared to receive the 2,000 tonnes of green hydrogen produced at Kuqa.
Of course, even if the Tahe facility could not take the lower-than-expected output from the Kuqa project — which would be a major, easily avoidable planning failure — why would Sinopec choose to stop production rather than selling any excess hydrogen on the open market?
But according to BNEF analyst Xiaoting Wang, the opposite is true.