China's Longi Green Energy Technology Co. (601012.SH), the world's leading manufacturer of solar modules, is entering the hydrogen sector. This move could enable the storage of excess solar power generated during the day to be used during periods of low production.
Longi, which makes wafers, cells and solar modules, has partnered with Shanghai-based private equity fund Rosefinch Asset Management Co. Ltd. established a hydrogen-focused subsidiary with registered capital of 300 million yuan ($ 45.67 million), according to the National Enterprise Credit Information Advertising System. It was not disclosed how much each partner would like to invest.
The new company, Xi'an Longi Hydrogen Technology Co., was founded on March 31st and, according to the document, specializes in the separation of gases and liquids and the manufacture of cleaning equipment. Longi's founder Li Zhenguo will be the CEO and chairman of the new company.
China first defined hydrogen – a clean energy source that combines with oxygen and water as a by-product – as an energy source in April last year. Since the country wants to achieve peak values for carbon emissions by 2030, state energy conglomerates such as Sinopec are relying heavily on hydrogen despite low profits with the current technology.
Such electricity generated with hydrogen is seen as a possible solution to the irregularity of renewable solar and wind power supplies, the electricity production of which depends on daylight and weather conditions. At peak times, such solar and wind turbines often waste electricity due to insufficient demand and no storage space for excess power.
The special form of hydrogen used in hydrogen power itself requires energy to be generated. For example, excess energy from solar and wind power plants generated at peak times can be used to produce such hydrogen, which can later be used to generate electricity using hydrogen fuel cells when the sun is not shining or the wind is not blowing.
Solar energy capacity is expected to increase in the future, which means demand for storage will also increase, a solar power analyst told Caixin, adding that using hydrogen fuel could be a way to address this issue.
China added 48.2 gigawatts (GW) of solar power capacity in 2020, a 60% year-over-year increase, according to the National Energy Agency, which predicted the pre-wind power source would be the country's third largest power source by the end of 2020.
The increasing amount of solar systems makes the (electricity) consumption problem one of the bottlenecks limiting the large-scale development of solar energy … and the solar-hydrogen model could effectively solve the problem, “Longi said in a post on his social media account Day before the new hydrogen company is officially founded.
Longi's move also reflects the trend of greater integration between new energy companies and the energy storage business including hydrogen, said the analyst, who added that opening up the field could give new impetus to Longi's development.
The Longi share price rose 4.84% on Tuesday.
Contact reporter Lu Yutong (firstname.lastname@example.org) and editor Yang Ge (email@example.com).
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