Electrolyser projects are set for a thousand-fold increase from the 0.2GW operating today, with 213.5GW planned for delivery by 2040, according to research.
On 11 May, Aurora Energy Research published a report, outlining how the majority (85%) of these electrolyser projects will be in Europe, with Germany (23%) accounting for the most. Germany is the most attractive market for low carbon hydrogen investment on the continent, though Aurora acknowledged the “promising policies and strategies” that have been released in Italy, Poland and the UK.
Increasingly, governments around Europe have been setting their sights on low carbon hydrogen’s potential. There has been a particular focus on promoting electrolysers with the EU targeting 40GW by 2030, while governments around the continent have pledged 34GW by the same date. Germany already has a 9GW pipeline of projects, ahead of the Netherlands (6GW) and the UK (4GW) as companies respond to the opportunity.
As well as growing in number, projects are scaling up fast as the technology and supply chain matures. Most projects today range between 1-10MWs but come 2025, a typical project will be between 100-500MW, supplying local clusters. By 2030, projects will be 1GW or more with large-scale hydrogen export projects emerging, deployed in countries that are benefiting from cheap electricity.
The cost of power and carbon footprint will be the key determining factors in driving the success of green hydrogen from electrolysis. France is set to have the lowest grid power prices to 2040, followed by Germany, as well as the lowest grid carbon intensity, alongside Norway and Sweden. Electrolysers can bypass the grid in an effort to achieve the lowest carbon footprint, connecting directly with renewable power sources. As the EU begins to determine carbon footprint thresholds within their laws and policies, the label of “sustainable hydrogen” will increasing be reserved for renewable-connected electrolysers.
Richard Howard, Aurora Research Director, said the growth of the hydrogen electrolyser pipeline to more than 200GW globally is an early indicator of rapid rollout of hydrogen infrastructure set to be seen in the coming years.
Howard added: “However, there remains a significant gap in costs between ‘green’ hydrogen production from electrolysers, and existing, carbon intensive hydrogen sources. Governments across Europe have set out ambitious plans for hydrogen to drive the decarbonisation of industry and other parts of the economy, but electrolyser projects are still held back by red tape combined with a lack of specific policies and incentives.”