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IEA marks electrolyzer manufacturing as promising in its report

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Despite the global energy crisis, momentum is still growing for low-emission hydrogen, according to a recent IEA analysis. Manufacturing of electrolyzers is predicted to increase significantly, and pilot projects are mushrooming in new industries including steel and transportation. However, given that these regions still make up a very minor portion of the hydrogen landscape, more strong legislative backing is required.

Electrolyzers, which are required to manufacture low-emission hydrogen from renewable power, are predicted to see a six-fold rise in worldwide manufacturing capacity by 2025, which is one of the promising advancements in hydrogen technologies that can help the clean energy transition. According to the most recent edition of the IEA’s annual Global Hydrogen Review, less than 1 million tonnes of low-emission hydrogen were produced globally in 2021, almost all of it originating from fossil fuel facilities that also used carbon capture, use, and storage.

The global demand for hydrogen as a whole increased to 94 million tonnes in 2021 from the previous annual high of 91 million tonnes in 2019. Last year, hydrogen produced from fossil fuels without carbon capture accounted for almost all of the rise. And even if the demand for novel uses of hydrogen increased by 60% in 2021, it only increased by 40,000 tons since the basis was so low.

If generated cleanly and judiciously used in industries like heavy industry and long-distance transportation where they may reduce emissions and replace fossil fuels, hydrogen and hydrogen-derived fuels can support both climate objectives and energy security. Although just a tiny portion of the projects are now under development, the pipeline of projects is growing as the global energy crisis increases interest in low-emission hydrogen. In order to establish the frameworks and generate the demand required to promote investment in low-emission hydrogen, especially in the electrolyzers and carbon capture technologies required to manufacture it, the Global Hydrogen Review puts forth a number of policy suggestions.

“There are growing indications that hydrogen will play a significant role in the transition to a cost-effective, secure, and clean energy system, but significant technological, regulatory, and market advancements are still required for it to realize its full potential,” said IEA Executive Director Fatih Birol. “A new energy economy is beginning to emerge, as seen by the significant flow of announcements for low-emission hydrogen projects that we are currently seeing. To remove regulatory obstacles and assist shovel-ready projects, governments must now put into practice specific policies.

According to the latest analysis, the worldwide demand for hydrogen is expected to exceed 115 million tonnes by 2030, taking into consideration the current policy decisions made by nations. That amount might increase to 130 million tonnes of countries completely adhere to their present climate commitments, with low-emission hydrogen accounting for more than a fifth of that total. In such a case, the demand for hydrogen would be equivalent on a worldwide scale for new uses.

Today, some novel uses for hydrogen are making noteworthy advancements. Just one year after the first pilot plant for the direct reduction of iron using pure hydrogen began operation, news of additional steel projects is rapidly increasing. In addition to more than 100 pilot projects for using hydrogen and its derivatives in shipping, the first fleet of hydrogen fuel cell-powered trains began operating in Germany. By 2030, projects combining hydrogen and ammonia in the electricity industry might have a combined capacity of roughly 3.5 gigawatts.

By 2030, the production of low-emission hydrogen might reach 16 million to 24 million tonnes annually, with more than half coming from electrolyzers powered by renewable energy if all projects presently in development are successful. The ability of the globe to create hydrogen using electrolyzers might increase to up to 290 gigawatts in 2030 as opposed to 0.5 gigawatts in 2021 if all projects now in the pipeline are completed. According to the paper, in areas with abundant renewable resources and those that now depend on imported fossil fuels for hydrogen generation, renewable hydrogen may already compete with hydrogen derived from fossil fuels based on current pricing.

With an annual production capacity of 8 gigawatts, electrolyzers might reach 60 gigawatts by 2030, according to industry announcements. Additionally, assuming upcoming electrolyzer projects are finished and the anticipated scaling up of production capabilities occurs, costs might decrease by almost 70% by 2030 compared to today.

The research makes numerous recommendations for how governments can lower risk and increase the viability of low-emission hydrogen economically. In addition to making sure that gas pipelines, terminals, and other infrastructure are developed to be compatible with hydrogen and ammonia, they may also assure that demand is created through auctions, mandates, quotas, and requirements in public procurement. In order to establish hydrogen markets on a global scale, collaboration is required to create uniform standards, laws, and certifications.

Arnes Biogradlija
Creative Content Director at EnergyNews.Biz

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