There are 342.9GW worth of hydrogen projects planned globally, an increase of 36pc, or 91.4 GW, since April 2021, according to a new report from consultancy Aurora Energy Research.

Three particularly large projects have been announced in the last six months: a 30GW project in Kazakhstan; the 28GW Western Green Energy Hub in Australia; and the 18GW Aman development in Mauritania.

Aurora’s model shows that most commercial-scale projects of 1GW or larger will come onstream in 2025 or after—before that most deployments will be pilot projects with electrolysers smaller than 1GW. Roughly half of the total planned electrolyser capacity is due for deployment in 2030.

In its hydrogen strategy, the EU aims for at least 40GW of electrolyser capacity across Europe by 2030. Some 34GW of electrolyser capacity across Europe has already been pledged by eight countries towards the 2030 target.

Continental shift

Germany, the Netherlands, Denmark and Spain have all announced projects over the last year and are the countries with the largest pipelines of electrolyser projects. The Netherlands has announced six developments in the last six months. The largest single announcement was the 1.3GW Green Fuels for Denmark project.

The UK also announced its hydrogen strategy over the summer with £961mn ($1.3bn) in funding for hydrogen-related projects. Aurora notes the strategy has already led to 4GW of the UK’s 5GW target (for both green and blue forms of the fuel) being announced. However, this is less than the amount committed by Norway, Germany and France.

91.4GW – Hydrogen project announcements in last six months

Energy firms Gasunie, Engie and Endesa are named partners on the most projects, with each participating in more than ten.

Solar, wind or a combination of the two are the favoured power sources for the vast majority of planned electrolysers in Europe, with wind the most popular overall, set to power 5.4GW of capacity announced since April.

Aurora has also conducted analysis on the countries with the most favourable conditions for green hydrogen production.

It identifies four main business models for the production of green hydrogen: inflexible electrolyser—which is grid-connected and runs at a consistent 95pc load factor; flexible electrolyser—which is grid-connected but can choose to operate at times of low power prices; co-located—an electrolyser connected to a dedicated renewable asset; and co-located (grid) which is the same model but with a connection that allows the electrolyser to run from the grid at times of low renewable generation from the dedicated asset.

Norwegian investment case

Norway remains the most favourable location for green hydrogen—the nation’s cheap electricity and renewables mean hydrogen produced from an inflexibly operated grid-connected electrolyser could compete with blue hydrogen by the early 2040s.

Hydrogen produced using dedicated renewables in a co-location model could be produced for as little as €2/kg ($2.3/kg), making it cost-competitive with blue hydrogen by as early as 2030.

Even with contracts secured for well-priced hydrogen offtake, most projects will struggle to be economical without subsidies, a separate analysis by consultancy Timera Energy finds.

“Even with a high-value offtake source, investment economics depend on significant policy support, as was the case for wind and solar twenty years ago,” finds the firm’s Green Hydrogen Investment Case report.  

“Clarity around the structure of this support is the biggest hurdle preventing larger-scale deployment of capital,” the report adds. The analysis also finds that storage is vital in extracting maximum value from green hydrogen production.

“Hydrogen storage is typically a very valuable part of a green hydrogen system as it breaks the direct linkage between production and offtake and acts as outage insurance,” it says.

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Author: Tom Young