Forthcoming policy support could see a viable business case created for green hydrogen in 2022, according to research from Delta-EE.
On 1 February, Delta-EE detailed findings from its clean hydrogen projects database, where it set out how 115 projects are due to become operation in 2022 and 2023, accounting for a collective potential electrolyser capacity of 2,138MW. It added that 37% (794MW) of these have reached final investment decisions or been awarded public funding in Europe or the UK. Many are dependent on positive legislative indications and incentives from their respective governments.
It highlighted forthcoming support measures, including the UK’s hydrogen business model and Net Zero Hydrogen Fund, set to launch in 2022 and 2023; the UK’s aim of having regulatory frameworks in place in the early 2020s; and the EU’s RED II delegated act and Hydrogen and Decarbonised Gas Package, all of which could help see 2022 be a “tipping point for a flurry of activity”.
Further findings include that total green hydrogen demand in Europe will rise from 9,900 tonnes per year in 2021, reaching 620,000 tonnes by 2026. Demand from the industrial sector outstripped demand from transport in 2021 for the first time, with Delta-EE forecasting that it will account for over 60% of green hydrogen demand by 2026. There are 15 industrial projects awaiting final investment decisions or public funding, linked to 894MW of electrolyser capacity, set to come online in 2022 and 2023.
Dr. Robert Bloom, Service Manager for Delta-EE’s Global Hydrogen Intelligence Service, said: “Our research suggests that 2022 could be the year where we see the necessary policy environment develop that could drive projects in the tens or even hundreds of megawatts towards coming online. Long-term incentives and long-term policy will allow de-risking of projects. This will give developers confidence that project finances are viable, and customers can be provided with a cost-effective solution leading to the green lighting of a number of the planned projects in the UK and Europe.”