Green hydrogen projects will continue to spread and eventually significantly outnumber blue hydrogen installations, Bridget van Dorsten, hydrogen research analyst with Wood Mackenzie, said at the consultancy’s Solar & Energy Storage Summit in San Diego, California.

The EU’s RepowerEU plan, which aims for the EU to use 20mn t/yr of green hydrogen by 2030, will significantly accelerate deployment. 

Wood Mackenzie estimates that the global hydrogen project pipeline is currently at 64mn t/yr, with green hydrogen making up 60mn t/yr of that. More than 300GW of electrolyser installations are now planned, 30pc of which are in Europe.

1,000GW – Estimated global electrolyser capacity by 2050

Global electrolyser capacity will amount to 1,000GW by 2050, almost 10pc of which will be in the US, according to Wood Mackenzie projections. 

More than 700 low-carbon projects are now on track across the world, the consultancy estimates.

US policy incentives

“Policy is an important factor for hydrogen in the US,” says van Dorsten. For example, incentives in President Joe Biden’s Build Back Better legislation, urrently stalled in Congress, would provide for the scaling-up of green hydrogen faster than other forms of low-carbon hydrogen.

The BBB legislation offers the choice of a production tax credit of up to $3/kg for ten years or an investment tax credit for up to 30pc of the cost of the electrolyser. The size of the credit depends on the carbon intensity—the quantity of CO₂ emitted to produce 1kg of hydrogen—so only very low-carbon hydrogen would get the full investment tax credit.

By 2030, US green hydrogen projects will need power-purchase agreements of $10/MWh and a load factor of 40pc to be cost-competitive, van Dorsten says, noting this makes securing cheap renewables key, whether from a purpose-built project or by using curtailed green electricity.

Green hydrogen in the US will primarily be used for fertiliser production; steel manufacturing; heavy-duty transport such as trains, trucks and buses; and power generation.

Regarding transporting hydrogen in natural gas pipelines, van Dorsten says in the US there is a danger of embrittling old pipelines, but it could be possible in Europe, where the pipelines are newer.

The US is third in the world in terms of the number of green hydrogen projects it has under development, behind Europe and Australia. In 2050, the US will still be in the top three, behind Australia and Germany, Xiaojing Sun, head of solar at Wood Mackenzie, told the conference.

Sun says US electrolyser installations will grow from 0.28GW in 2025 to more than 5GW in 2035 and 90GW in 2050.

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Author: Ros Davidson