Abundant Resource Reserves

Hydrogen as a clean energy carrier can be produced from a variety of sources, e.g., coal, oil, natural gas, biomass, waste water (Jiang et al., 2010; Lu et al., 2013). Moreover, hydrogen can also be produced form abundant renewable resources, e.g., hydropower, wind power, and solar power. The estimated amount of the renewable energy resources in China is approximates 7.2 billion tonnes coal equivalent (Ma et al., 2009).

Wind. China is rich of wind resources in the north, from Xinjiang Autonomous Region through Gansu Province to Inner Mongolia Autonomous Region, and in the southeast, along the coastline, and the total available wind energy is about 3.2 TW (Lew, 2000). China had been the world’s second largest wind producer since 2011, generating 73 TW h electricity, and China’s installed on-grid wind capacity reached 61 GW in 2012 (EIA, 2014). According to the Medium and Long-term Development Plan for Renewable Energy, the total capacity could amount to 150 GW by 2020 with an annual increase rate of 22.5% (Zhao et al., 2011; Ru et al., 2012).

Hydro. The hydropower resources in China are concentrated in Yangtze, Lancang, and Yellow Rivers as well as their tributaries (Liu et al., 2011a, 2011b). Hydropower plays an important role in China’s electric industry, the installed capacity of hydropower reached 14,823 million kW at the end of 2007 (Chang et al., 2010). At the end of 2008, the installed capacity of hydropower in China, the largest in the world, accounted for 21.6% and 16.4% of national installed electricity capacity and annual electricity generation, respectively (Liu et al., 2011a, 2011b). According to the recent report of International Energy Agency and US Energy Information Administration, the gross hydro-based electricity was 698,945 GW h in 2011 (IEA, 2011), the installed hydroelectric generating capacity was 249 GW in 2012 and expected to continuously increase rapidly (XinhuaAgency, 2011).

Biomass. As a large agricultural country, the biomass resource in China is equivalent to 890 million tons of standard coal resource annually (Liu et al., 2011a, 2011b; Feng et al., 2012). Moreover, more and more attentions have been paid to biomass power by the Chinese administrations, The Law of Renewable Energy with a series of preferential policies related to biomass power have been issued to promote the development of biomass power (Wu et al., 2010; Zhao and Yan, 2012). In 2011, the total installed biomass power capacity in China was more than 8 GW and also expected to increase significantly (EIA, 2014). The goal of biomass power generation drafted by Chinese Central People’s Government is to achieve 30 GW of installed capacity in 2020 (Zhao et al., 2013b). Besides using biomass power for hydrogen production, biomass is also one of the most promising feedstocks for hydrogen production in China, the estimated hydrogen supply potential from forest residues and that from agricultural residues is around 2.01×10¹¹ and 2.79×10¹¹ N m³, respectively (Lv et al., 2008).

Solar. There is a great potential for solar power in China, because many regions of China, such as Tibet, Qinghai, Xinjiang, Gansu, can produce vast supplies of solar energy (Liu et al., 2011a). The development of solar in China used to be slow before 2004 but has speeded up during the past 10 years. In 2007, the total yield of solar energy in China was 1088 MW (Wang and Chen, 2010), and in 2011, the gross electricity generated by solar thermal and solar photovoltaic systems reached 1 and 2532 GW h in 2011, respectively (IEA, 2011).

Geothermal power. The geothermal energy in China is mainly reserved at the circum-pacific tropical and Himalaya–Mediterranean tropical zone. Around China, more than 3200 thermal spots have been found, and the most famous geothermal power plant is Yangbajing geothermal power station located in Tibet, the gross electricity generated by which reached 153 GW h in 2011 (Wang and Chen, 2010; IEA, 2011; Feng et al., 2012; Bertani, 2012).

Ocean energy. Ocean energy resources include tidal energy, wave energy, oceanic flow energy, temperature difference energy, and salt difference energy; however, only the tidal energy can be actually utilized at present (Wang and Chen, 2010). China’s available ocean energy was mostly reversed in South China Sea. It has been estimated that about 1.1×10¹¹ W of tidal energy can be exploited (Wang and Chen, 2010; Wang et al., 2011).

Besides, nuclear energy is also a promising power for hydrogen production in China (IAEA, 2011; Zhou and Zhang, 2010; Zhou et al., 2011). Therefore, it can be concluded that there are abundant resources in China for hydrogen economy.

Great Development Potential

China is unique for its vast country, large population, and rapid economic growth (Lu et al., 2013; Ma et al., 2010a). With the rapid development, a large amount of energy is needed for the economic and social development (Zhang et al., 2009; Fang and Zeng, 2007; Wang et al., 2010), and China has become the world’s largest energy consumer and emitter of greenhouse gases. Accordingly, China has paid more and more attention on developing renewable energies (Yuan and Lin, 2010). On the other hand, transport and communication is the fastest growing energy consumer in China. It is reported that the on-the-road vehicles in China have increased by nearly 50-fold from 1.36 to 70 million units during the last three decades (Sun et al., 2012), and the development of hydrogen and fuel cell vehicles is one of the most promising strategies to achieve the near-zero emission in transport and communication (Yan and Crookes, 2010; Manzardo et al., 2012; Ren et al., 2013). Ma et al. (2010b) predicted that the total demand of hydrogen of China is around 25.11 to 70.5376 million tonnes coal equivalent in 2050. Therefore, China has a great potential for developing hydrogen economy.

Benefits for Environmental Protection

Environmental pollution, especially atmosphere pollution, has become a vital problem in China since more and more haze days are being observed in most Chinese cities along the east coast (Sun et al., 2013). The only choice for China to solve this problem is to change its energy structure. Hydrogen is one of the most promising clean energy carriers in the future because it can not only be used without pollutants but also can be manufactured by using green processes, e.g., photolysis water splitting method, biological and photobiological water splitting, thermal water splitting, and biomass gasification (Manzardo et al., 2012; Ren et al., 2013; Sun et al., 2013). Therefore, hydrogen is one of the most environment-friendly fuels that can, to some extent, solve the environmental problem of China.

High Cost

The cost of hydrogen energy has been discussed from a life cycle perspective including production, transport and storage, and use (Feng et al., 2004; Yao et al., 2010). The cost for production, storage, and transportation and usage of 1 kg hydrogen in China were estimated to be about 6.82–12.16 Yuan RMB, 3.22–4.27 Yuan RMB, and 30.82–48.83 Yuan RMB, respectively (1 Yuan RMB = 0.16 US $) (Feng et al., 2004). It can be seen that the cost in the use accounts for more than 70% of the total cost, which is the biggest obstacle that hinders the industrialization and commercialization of hydrogen fuel cell vehicles in China.

Lack of Key Technologies

As a developing country, the development of hydrogen economy in China was relatively late; accordingly, the corresponding technologies for hydrogen production, storage, and transport in China are not as advanced or mature as those in the developed countries (Zhang and Zhen, 2006). The production of hydrogen in China was limited to the conventional processes, i.e., coal gasification, natural gas reforming, and water electrolysis. China currently lacks the key technologies for hydrogen production using renewable resources, e.g., solar-powered and wind-powered hydrogen technologies; while these new emerging technologies are regarded as the promising pathways for hydrogen production in China due to their superior sustainability and the exceptional conditions of vast solar irradiation and high wind potential in China (Lew, 2000; Mason and Zweibel, 2007; Lu et al., 2011; Manzardo et al., 2012). Meanwhile, there are significant challenges to developing hydrogen storage systems for storing large quantities of hydrogen for the commercialization in large scale, and more effort is required to accelerate the commercialization of high-pressure gaseous hydrogen storage technologies in China (Graetz, 2009; Zheng et al., 2012; Gim and Kim, 2014).

Incomplete Hydrogen Infrastructure

Right now, one major obstacle for the advancement of hydrogen economy in China is the limited number of refueling stations due to the high cost of hydrogen infrastructure investment and the immature of its practical application.

Government Support

The stakeholders in China including high-level governments and energy experts have showed increasingly interests and willingness on hydrogen economy, and vehicles using hydrogen fuel cells have been demonstrated at the Beijing Olympic Games, Shanghai World Expo, Guangzhou Asian Games, and Shenzhen Universiade (Han et al., 2014). Many drafted policies, regulation, and laws promoting the development of hydrogen economy in China have already taken effect. The Energy Saving Law, drafted in 1997, issued in 1998 and revised in 2007, is an essential national policy of China with the objective to promote energy saving, improve the energy utilization efficiency, protect the environment, and achieve the harmonious development of economic and society. The Renewable Energy Law was approved by the Congress on February 28, 2005 and took effect from January 1, 2006, its stated aim is to optimize China’s energy supply, mitigate environmental pollution, improve energy supply security, and promote rural social development (Zhang et al., 2010). The Economy Promotion Law, which was adopted by the fourth session of the Standing Committee of the 11th National People’s Congress on August 29, 2008 and has been taken effect from January 1, 2009, is closely correlated to the Renewable Energy Law with the aims to facilitate recycling, improve resource utilization efficiency, protect environment, and realize the sustainable development (Ma et al., 2010a). Moreover, a variety of policies for promoting the development of new and renewable energy were also issued by different implementation bodies. For instance, the 10th Five-year Plan on the industry of new and renewable energy was issued in 2001 by State Economy and Trade Commission of China. The National Development and Reform Commission issued the Provisional administrative measures on the price and expense allocation of electricity generated from renewable energy in 2006 (Fang and Zeng, 2007). All these policies, laws, and regulation are beneficial for the development of hydrogen economy in China, demonstrating support for the hydrogen economy by the Chinese governments.

Meanwhile, a variety of technological programs concerning the production, storage, and use of hydrogen have been sponsored by the Chinese governments to promote the development of hydrogen economy in China since 2000 (Yuan and Lin, 2010). The Ministry of Science and Technology of China has launched several funding programs such as National Basic Research Programs (973 Programs) and High Technology Research and Development Program (863 Programs) for the research and development of hydrogen production, storage, and utilization (e.g., fuel cell systems) in China (Lu et al., 2013).

High Social Acceptability

With the booming of the Chinese economy, environmental contaminations caused by not only heavy industry but also transportation, especially atmospheric pollution, have become more and more severe (He et al., 1995; Chan and Yao, 2008). For instance, the haze-fog problem in China which becomes more and more serious recently drives China’s administration to adjust China’s energy structure (Sun et al., 2006). Hydrogen, as an efficient energy carrier, which can not only be used with near-zero impacts on the environment during its oxidation, but also can reduce the risk of energy supply distribution and price volatility of the fossil energy markets, has great potential of high social acceptability in China with its advantages being known by more and more people, hydrogen economy would be approved and accepted by the public in China based on the survey in China and the experience learned from European case studies (O’Garra et al., 2005; Ricci et al., 2008; Roche et al., 2010).

Deepened Cooperation

Hydrogen technologies in China are making great progress recently because of international and national cooperation. China is involving in international cooperation with the United States, the European Union, Canada, Italy, and some other international organizations (Chen, 2005). Domestically, Chinese companies, universities, and research institutes have deepened their cooperation and established a number of production–education–research bases of hydrogen technology. For instance, Shanghai Fuel Cell Vehicles Powertrain Co., Ltd. has cooperated with Tongji University in developing “Chaoyue” series of fuel cell cars (Lu et al., 2013).

Deficiency of Investment Channels

At present, investments in hydrogen economy in China, including research and development, infrastructure construction, popularization of hydrogen applications, as well as the education on hydrogen technologies, are mainly sponsored by the governments or state-owned enterprises. Few private companies are likely to opt to invest in hydrogen industry due to its low profit and high risk, and the subsidies for hydrogen development from the government are prerequisite for many private hydrogen companies to sustain normal operation. For promoting the popularization and healthy development of hydrogen economy, the investments should be diversified in the future.

Competition with Other Renewable Resources

Although hydrogen shows a promising future in China, it is just an energy carrier rather than an energy source, and the competition with other renewable resources can not be ignored. As an energy carrier, hydrogen has a similar role with electricity, which could also be manufactured from other renewable or low-carbon resources, e.g., wind, hydro, solar, nuclear, and biomass (Lu et al., 2013). Furthermore, the technologies for electricity generation from renewable resources are more advanced and mature than those for hydrogen production. For instance, the energy efficiencies of electricity produced from solar power and wind power are 13% and 39% (mean value), and the costs for electricity generated by the two pathways are 2.95 and 0.60 Yuan RMB/kW h (mean value), respectively (Evans et al., 2009; Liu et al., 2011a). In contrast, the energy efficiency of hydrogen production is still low, and therefore, the cost for hydrogen production is significantly high. Taking photovoltaic electrolysis and wind turbine electrolysis as examples, the energy efficiencies are only 5% and 31%, and the production costs are about 17.36 and 36.75 US$ day⁻¹ kg⁻¹, respectively (Pilavachi et al., 2009; Acar and Dincer, 2014). Therefore, “hydrogen from renewables versus electricity from renewables” is still a debate in China, which, to some extent, has restricted the hydrogen application in large scale. Besides the drawbacks in technology and price, the environmental performance of hydrogen, especially when comparing with other energy carrier (i.e., electricity) produced by renewable energy resources in life cycle perspective, is also questionable as the environmental performance of hydrogen production by different pathways is quite different.

Unconfirmed Market Potential

The future of hydrogen economy in China, especially fuel cell vehicles, faces some unpredictable risks in market development. The main risk is the unconfirmed potential market. As mentioned, hydrogen, as a clean energy carrier, has the high risk to be partly substituted by electricity, e.g., wind electricity, hydroelectricity, solar electricity, and nuclear electricity. Therefore, the unconfirmed potential market is a threat for the development of hydrogen economy in China.