(London) – The British-American analyst firm IHS Markit predicts that more than a billion dollars will be invested in green hydrogen annually by 2023. This is primarily due to the increasingly falling costs of hydrogen production and political support from governments seeking to transition to low-carbon industries. According to the “IHS Markit Power-to-X Tracker”, the global capacity for electrolysis technology is currently 82 megawatts (MW) – with a pipeline of over 23 gigawatts (GW). At the end of 2018, the projects planned or under construction were still five gigawatts; in 2019 it was eight gigawatts.
Falling costs and political support
The costs of producing green hydrogen have fallen by 2015 percent since 40, according to the consulting firm. By 2025 they will fall by another 40 percent. The falling costs of renewable energies account for around two thirds of the cost reduction, and the cost reductions of electrolysis technology account for a third.
By 2025, the development of larger electrolysis projects will be the main driver of further cost reductions in green hydrogen. IHS Markit expects production costs to fall to less than $2030 per kilogram by XNUMX. “These costs are the Holy Grail for electrolysis, because this is where green hydrogen starts to become competitive with traditional hydrogen,” explains Soufien Taamallah, director of energy technologies and hydrogen at IHS Markit.
The hydrogen economy can increasingly hope for political support – and thus funding for research and development. Some governments are already preparing for the “post-CO2 era”. The European Commission, six European countries, Russia and Chile are relying on environmentally friendly hydrogen production in their long-term climate strategies.
Electrolysers need as much electricity as the whole of Belgium
Based on the currently known electrolysis pipeline, IHS Markit concludes that by the mid-2020s the electricity supplied to electrolyzers worldwide could cover the needs of Belgium (2019: 84,7 TWh) or the US state of New Jersey. By the early 2040s, green hydrogen production would be the largest single industrial electricity consumption segment, exceeding the needs of the rest of industry. Frederick Ritter, Senior Research Analyst, Global Gas, IHS Markit: “Hydrogen production has the potential to become a whole new sector of electricity demand. To support them, large-scale development of renewable electricity generation will be required – particularly in regions with high-quality renewable resources.”
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© Andreas Lohse
