With the rapid expansion in plans for electrolyzer production facilities worldwide set to drive down costs, U.S.-owned analyst WoodMackenzie has said Brazil and Chile are “amongst the front-runners” to harness affordable clean hydrogen this decade.
The Scotland-based data company, which is owned by New Jersey business Verisk, has examined the economics of green hydrogen – electrolyzed in a process powered by renewable electricity – in 24 markets and predicted it will be competitive with less sustainable forms of the energy carrier in half of those economies by 2030.
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WoodMac today pointed to plans for large scale electrolyzer manufacturing facilities which have been announced “in recent weeks” by U.S. company Ohmium, English business Clean Power Hydrogen, Danish outfit Green Hydrogen Systems, German manufacturer Sunfire, and Australian player Fortescue Future Industries.
With similar plans having already been made by U.S. automotive business Cummins, Denmark's Haldor Topsoe, Sheffield-based ITM Power, Oslo's Nel Hydrogen, French entity McPhy, German brands Siemens and Thyssenkrupp, and New York-based Plug Power, WoodMac said economies of scale, as well as automated production and modularity will drive a “significant drop” in the cost of electrolyzers by 2025.
The scale of electrolyzer production planned, according to WoodMac, is such that a business segment able to produce only 200 MW of electrolyzer capacity per year, until 2019, had leapt in scale to 6.3 GW by the summer, with plans for 1.3 GW of production lines announced in January to March alone.
With alkaline and polymer electrolyzer membrane costs set to fall 35-50% by 2025, according to today's note from WoodMac, and solid oxide electrolyzer technology to get even cheaper, a combination of hydrogen demand and cheap-renewable-energy generation capacity will dictate where the world's green hydrogen pioneer markets will occur. That equation puts Brazil and Chile in the spotlight, according to the analyst.
WoodMac has analyzed the costs of renewables-driven hydrogen against grey, brown and blue versions of the energy carrier, powered by natural gas, lignite coal and gas-plus-carbon-capture, respectively.
While the analyst noted a huge expansion in planned hydrogen-linked, carbon capture projects, which is likely to bolster advances in blue hydrogen, it added, the recent rise in global commodity prices has harmed the economics of fossil-fuel powered hydrogen production versus its green equivalent.
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