Since 2017, Japan has become the first country to formulate a national hydrogen strategy. The Japanese government intended to invest over USD137 billion over 15 years to use hydrogen in many applications, such as power generation, mobility, residential and commercial fuel cells, industrial heating, chemicals, etc. After that, many countries realized that hydrogen might play a crucial role in new energy, which prompted them to draw up some relative strategies to develop this energy. However, in recent years, some people think Japan’s hydrogen ambitions may do more harm than good. Elon Musk, the co-founder and CEO of Tesla, also has a negative view of hydrogen and its fuel cells. So, is it necessary to develop hydrogen energy?

Hydrogen, the lightest of all gases, is colorless, odorless, tasteless, non-toxic, and highly explosive. There are various methods for producing hydrogen, each with different environmental impacts. Grey hydrogen is produced from coal, oil, natural gas, and other fossil fuels, but this method releases a significant amount of carbon dioxide into the atmosphere. Blue hydrogen is generated from the steam reforming of natural gas. The Japanese government has prominent agreements with many countries by using this method to produce hydrogen. However, fossil fuel extraction can result in methane leaks, and blue hydrogen production may increase global greenhouse gas emissions. Green hydrogen is produced by renewable energy (such as wind power, hydropower, and solar energy), the most promising and cleanest production method.

(Source: Australian Institute for Business and Economics)

As the semiconductor industry, fine chemicals, and optoelectronic industry continue to develop, the demand for high-purity hydrogen is increasing. For instance, hydrogen energy in Japan includes renewable energy electrolysis for hydrogen production, as well as the development of new planes and ships. South Korea also places significant emphasis on the development and application of hydrogen-powered vehicles. Meanwhile, Germany leads in hydrogen and fuel cell technology, explicitly positioning hydrogen as an important choice for heavy transport and industrial raw materials.

These policies and technological support have led investors to see a market with enormous potential. However, hydrogen has a fatal flaw—it is highly flammable, and a gas leak will pose a fire or explosion risk. Due to the physical properties of hydrogen, it must be stored in high-pressure tanks, but the transport volume is also very limited. These limitations make the hydrogen supply chain more fragile. Insufficient hydrogen refueling station networks have impacted sales. The Toyota hydrogen-powered Mirai, which sold nearly 2,000 units in the United States in one year, has seen declining sales since its launch. Similarly, sales of the Hyundai hydrogen-powered NEXO are also collapsing. Until 2023, global sales of hydrogen-powered vehicles will remain below 50,000 units. But the poor sales do not mean hydrogen energy has failed, it just has not been a big success.

There are lots of emerging hydrogen markets: data centers, ports, steel manufacturing, and medium- and heavy-duty trucks. The hydrogen market is still vast. According to Hydrogen Insights 2023 from the Hydrogen Council, direct investments will reach USD 320 billion into hydrogen projects through 2030, and at least 795 plans will be fully or partially deployed by 2030. Research from Markets and Markets indicates that the growth in hydrogen demand in recent years is due to the increasing government focus on developing hydrogen-based economies and investment in hydrogen infrastructure. The hydrogen market is projected to benefit greatly from the rising usage of low-emission fuel. From the distribution across various stages of the industrial chain, hydrogen production projects will account for the largest share of investment. Due to the need for funding in end-use projects related to fuel cells and road vehicle platforms, investments in hydrogen applications are also higher in mature projects.

(Source: Hydrogen Council)

Green hydrogen, the most environmentally friendly method of hydrogen production, provides an enormous market for hydrogen energy development. Green hydrogen primarily relies on power sources to split water, and the main function of a hydrogen production power source is to convert AC/DC into a type of direct current that electrolysis of water can use. A complete hydrogen production power source typically includes rectifiers, transformers, control systems, cooling systems, and auxiliary equipment. With the advancement of green hydrogen technology, improving efficiency, reducing power loss, and extending equipment lifespans have become the core of hydrogen power generation technology development. The Hydrogen Council emphasizes that there will be more than 230 GW of electrolysis capacity to be operational by 2030, implying that more than 300 times more growth in deployment is needed over the next seven years to realize this. Geographically, Europe, Latin America, and Oceania all have potential markets.

(Source: Hydrogen Council)

As an indispensable role in ensuring the efficient operation of the electrolyzer, transformers for hydrogen electrolysis also have a wide market. The International Energy Agency (IEA) estimates that the annual production of low-carbon hydrogen will reach 38 million tons by 2030, which represents a significant growth from the mere 1 million tons produced in 2022. According to the forecasts of Reliable, the transformers for the hydrogen electrolysis market are anticipated to grow annually by 13.7% (CAGR 2024 - 2031). This type of transformer can save costs, reduce environmental impact, and increase the production of green hydrogen.

The hydrogen rectifier transformer produced by CEEG is an advanced transformer for hydrogen electrolysis. It is equipped with a high-temperature insulation system and a 7-step temperature control system, which ensures that the transformer has maximum safety, thermal insulation, and a long lifespan. CEEG is actively participating in China’s first 10,000-ton-level new-energy-based hydrogen production project. The project, known as the Narisong Photovoltaic Hydrogen Production Industry Demonstration Project, is located in Inner Mongolia. One of the critical technologies within this project is the design and manufacture of the hydrogen rectifier transformer. CEEG has successfully produced the ZHSS-12000/35 24-pulse IGBT hydrogen production rectifier transformer, which ensures safe and reliable hydrogen production. This innovative transformer plays a vital role in converting renewable energy into efficient hydrogen production through water electrolysis.

CEEG is committed to staying at the forefront of hydrogen production technology development and providing reliable equipment to reduce greenhouse gas emissions. As a company deeply invested in environmental protection, CEEG has dedicated over 30 years to manufacturing eco-friendly and high-quality power equipment. We also eagerly anticipate collaborating with more enterprises!