More than $4.5bn was invested in the hydrogen sector in the first quarter of 2021, with 55 projects announced, according to research by consultancy Wood Mackenzie.

Australia’s Enegix Energy announced during the quarter that it was investing in a green hydrogen project with the state government of Ceara in Brazil, due to produce 600mn kg/yr of green hydrogen from 2025.

This has boosted current announced electrolyser capacity to 6.3GW, with 1.3 GW added in the first quarter of 2021 alone.

“The capital markets absolutely understand green hydrogen now” Cooley, ITM Power

Global announced electrolyser capacity was just 200MW until 2019, showing the rapid scale-up in the technology as countries develop national hydrogen strategies and position themselves as producers to a nascent global market.

The 2021 project investments add 2.4mn t/yr to announced production capacity, bringing the overall figure to over 13mn t/yr.

Project announcements spiked in 2019 but fell off sharply in 2020 because of the Covid 19 pandemic.

“The capital markets absolutely understand green hydrogen now,” said Graham Cooley CEO of electrolyser manufacturer ITM Power, speaking at a recent conference organised by Wood Mackenzie. “We would not be where we are today if we did not have the backing from the city,” he added.

However, more incentives are still needed to ensure the 1,000GW of electrolyser capacity necessary to meet demand forecasts comes onstream before 2050, Wood Mackenzie says.

“We need to treat hydrogen like we did wind and solar,” said Keith Malone, head of public affairs at the California Fuel Cell Partnership, speaking at the Hydrogen Americas Summit.

“We need a stable playing field and key market signals for industry which in the US means an investment tax credit.”

With the right support, Wood Mackenzie estimates green hydrogen will be competitive with fossil fuels by sometime between 2028 to 2033.

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Author: Tom Young