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China could drive electrolyser market according to new hydrogen market report
Nearly everything is set to double this year in the world of clean hydrogen, from electrolyser installations to the number of countries creating hydrogen strategies, according to a new study from BloombergNEF (BNEF).
The surprising growth of hydrogen in China during the 1H2021 could drive the electrolyser market to exceed 2 GW in 2022. Still, clean hydrogen demand lags behind electrolyser makers’ aggressive capacity expansion plans, suggests the study. To sustain the momentum, more policies stimulating clean hydrogen demand need to emerge. China’s carbon neutrality target may be doing the most on this front, it says.
Electrolyser shipments are set to double in 2021 and quadruple in 2022, reaching at least 1.8 GW, forecasts BNEF. China should account for 60–63% of global installations. By 2030, cumulative global installations could cross 40 GW based on developer disclosures. Alkaline electrolysers will continue to dominate the market due to better economics, with an 80% share in 2022.
Meanwhile, electrolyser manufacturers are building more factories than needed in response to rising sales. Some 16 GW of manufacturing capacity could come online by 2024, enough to meet demand several times over. This may leave many factories underused, pushing down prices.
Net zero emissions targets are driving hydrogen deployment in Europe and China. In Europe, a rising CO2 price is incentivising industrial companies to explore hydrogen. In China, large firms are investing in hydrogen to demonstrate alignment with the country’s carbon neutrality target.
Government funding is on the rise, reports BNEF, with $11.4bn/y available for low carbon hydrogen projects over 2021–2030. For most countries, these subsidies total less than 0.1% of GDP, well below what solar got in its early years, but still a sizeable boost compared to a few years ago.
But widespread demand for clean hydrogen is still a few years away, suggests the report. Few countries have laid out clear plans to drive a broad base of demand. That said, several large projects have been proposed for later in the decade and more may emerge soon in China. Plans to build significant hydrogen storage infrastructure in Europe will also enable large-scale demand in future, says the study.