Adrienne Blume
The low-carbon H2 sector is set to double in size this year, according to research by BloombergNEF, helped by unexpected growth from China in the first half of the year.
This doubling includes the electrolyzer market, which is anticipated to reach at least 1.8 GW in 2022. Electrolyzer capacity is forecast to expand rapidly over the near term, hitting 16 GW by 2024.
The COVID-19 pandemic has weighed on global H2 demand, which was approaching 80 MM tpy before falling back in 2020 as reductions in fuel and fertilizer demand curbed industrial H2 consumption. However, government support for green H2, particularly in Europe and Asia-Pacific, has helped significantly scale up production capacity this year and will propel sector development forward in 2022. Furthermore, as tightening emissions restrictions force more carbon capture and storage (CCS) projects to be implemented at processing plants, analysts expect production capacity for blue H2 to double by 2025.
As of late September 2021, approximately 76 MW of electrolyzer capacity was in operation worldwide. By the end of the year, an estimated 3.1 GW of capacity are expected to have been added. After the startup of several large-scale electrolyzers so far in 2021—such as a 10-MW unit at Shell’s Rheinland refinery in Wesseling, Germany in July and a 20-MW installation at Air Liquide’s site in Bécancour, Quebec, Canada in late January—a number of significant green H2 projects are set to be commissioned in 2022.
For example, HydrogenPro will install the largest single-stack, high-pressure alkaline electrolyzer at Heroya Industrial Park, Norway in Q1 2022, to produce 1,100 m3/hr of green H2. HydrogenPro is targeting an H2 production cost of $1.20/kg in 2022, based on an electricity price of $20/MWh. Meanwhile, Linde intends to start up the world’s largest PEM electrolyzer, a 24-MW facility powered by wind, at its Leuna chemical complex in Germany in the second half of 2022. Around the same time frame, Repsol will start up a 2.5-MW electrolyzer to produce renewable H2 at its Petronor refinery in Basque country.
Europe is on track to have 5.2 GW of operational electrolyzer capacity by 2024, to which the new projects in Germany and Spain will contribute. The EU, however, has an official target of 6 GW of electrolyzer capacity by 2024. According to estimates, 6 GW of electrolyzer capacity would be able to produce up to 1 metric MMtpy of green H2.
Major moves are seen in Asia, as well. Chinese energy giant Sinopec plans to spend $4.6 B on H2 by 2025. Its first green H2 project in Ordos, Inner Mongolia, is set to come online in 2022 with a production capacity of 20,000 metric tpy, powered by a 270-MW solar station and a 50-MW wind farm. The H2 produced from the plant will be supplied to a coal chemical project. In preparation for releasing a national H2 strategy, China stated in late September its ambitious plan to install 100 GW of electrolyzer capacity by 2030. Most of this capacity would come in the form of alkaline electrolyzers, of which China is a significant and growing manufacturer.
With more national H2 strategies anticipated to be released next year and more project proposals and progress being earmarked daily, 2022 will be a powerful year for building out the H2 economy.
