Electrolyser prices in China have fallen to around $400/kW or lower, widening the discount to prices in Europe, according to thinktank the Energy Transitions Commission (ETC).

Prices in China are under pressure as the country’s manufacturing capacity is growing rapidly, while capacity growth in Europe appears constrained by several factors including reduced cell manufacturing and a lack of track record among some producers, the ETC states in a report titled Better, Faster, Cleaner: Securing Clean Energy Technology Supply Chains.

“In Europe, prices continue to be far above [the Chinese] level, and potential early users report that price quotes for green hydrogen or electrolyser supply in the mid-2020s are higher than expected,” the ETC says.

3,500–8,000GW – Potential electrolyser demand in 2050

Some forecasts suggest European electrolyser prices will still be in the range of $400–500/kW by 2030, it adds.

The ETC estimates that total global hydrogen demand will reach 500–800mn t/yr by 2050, of which around 450–700mn t/yr will likely be produced via electrolysis. That implies a need for about 3,500–8,000GW of electrolyser capacity.

Compared with this eventual need, estimates for the growth of electrolyser installations reaching 85GW per annum by 2030 and cumulative installations of 240GW by the end of this decade are still modest, the ETC says. However, this reflects the expectation that green hydrogen demand is likely to develop more slowly in the 2020s, before growing dramatically in the 2030s.

“Announced plans to bring online a cumulative 50GW of global electrolyser manufacturing capacity by 2025, with continued growth certain thereafter, would therefore seem sufficient to meet demand during this decade,” the ETC adds.

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Author: Stuart Penson