Global electrolyser manufacturing capacity is expected to more than double between now and the end of 2024 but is not expanding fast enough to meet projected demand for electrolysers in 2030, according to consultancy Aurora Energy Research.

Nearly 200GW of electrolyser projects are planned globally by 2030 but cumulative global manufacturing capacity will reach only about 123GW by then, leaving a potential supply shortfall of around 30pc.

“The world’s electrolyser manufacturing capacity must grow even faster than planned to match global electrolyser ambition,” says Anise Ganbold, global energy markets lead at Aurora.

Aurora’s analysis shows manufacturer capacity increasing from a current 6GW/yr to 14GW/yr by the end of 2024. Among recent capacity additions are Nel’s alkaline electrolyser production plant at Heroya in Norway, ITM Power’s 1.5GW/yr facility in Sheffield—scheduled to come online by the end of next year—and Siemens Energy’s facility in Berlin, which the firm is converting to produce industrial-scale proton-exchange-membrane electrolysers.

Rapid demand growth

Demand for electrolysers is growing rapidly. Aurora identifies 365GW of electrolyser projects under development globally—a 21GW increase over the last six months. Europe remains the leader, with a 56pc share, 142GW of which are scheduled to start up by 2030.

“The world’s electrolyser manufacturing capacity must grow even faster than planned to match global electrolyser ambition” Ganbold, Aurora

This comfortably overshoots the revised 2030 target of 75GW set by the European Commission under its ‘RepowerEU’ plan to curb dependence on Russian gas in response to the invasion of Ukraine. The UK has doubled its 2030 target to 10GW, with half expected to be green hydrogen.

Despite the potential tightness in electrolyser production capacity, Aurora expects green hydrogen costs to fall through the 2020s as a result of technology developments and the maturing of the industry.

Green hydrogen will reach cost-parity with the blue variety in some European countries by 2030, based on the outlook for natural gas and carbon, it says.

Aurora’s latest green hydrogen cost projections show an expected range of €2.7-4.3/kg ($2.8-4.8/kg) across Europe by 2030, with the lowest costs seen in Denmark and Ireland.

Aurora rates Germany, the Netherlands and the UK as the top three most attractive countries to invest in low-carbon hydrogen in Europe.

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Author: Stuart Penson