Electrolyser capacity is set to increase from 0.2GW worldwide today to 213.5GW by 2040, a thousand-fold increase, according to Aurora Energy Research.
Its research found that the majority of this new capacity (85%) is to be located in Europe. Germany has clinched the top spot with 23% of planned electrolyser capacity, remaining the most attractive market for low carbon hydrogen investment in Europe despite what Aurora described as promising policies and strategies coming out of the UK, Italy and Poland.
In the UK, the Ten Point Plan promised up to £500 million to trial the use of hydrogen for heating and cooking, while the National Infrastructure Strategy unveiled a £240 million Net Zero Hydrogen Fund set to support both blue hydrogen and green hydrogen.
The UK currently has a pipeline of 4GW, with the Netherlands having 6GW and Germany having 9GW, all scheduled to be operational by 2040.
Capacities are also scaling up as the technology and supply chain mature, with a typical project to be 100-500MW by 2025 compared to between 1-10MW to date. By 2030, typical projects are expected to scale up further to 1GW+.
Aurora went on to explain that the key success factors for green hydrogen from electrolysers are the cost and carbon footprint of electricity, with France currently offering the lowest wholesale power prices while having a grid carbon intensity that is one of the lowest in Europe. However, Aurora noted that hydrogen made directly from renewable energy rather than the power grid can achieve the lowest carbon footprint.
Additionally, the European Union is starting to determine carbon footprint thresholds within their laws and policies, which will increasingly reserve the label of ‘sustainable’ hydrogen to renewable-connected electrolysers only.
Of the planned projects that state a power source, most will be wind power, followed by solar. A smaller number will utilise grid electricity. A large portion of the electrolysers indicate that the end user will be industry, followed by mobility.
In the UK, ScottishPower's green hydrogen project - set to include the UK's biggest electrolyser at 20MW - is to be powered by both the Whitlee wind farm and new solar PV, with a planning application for solar and storage being submitted in April.
Additionally, a green hydrogen project on the island of Eday, Orkney, is to combine tidal energy with a 1.8MWh flow battery from Invinity Energy Systems, with the project located at the European Marine Energy Centre’s (EMEC) tidal energy test site.
Richard Howard, research director at Aurora Energy Research, said that the growth in the electrolyser pipeline is an early indicator of the rapid rollout likely to occur in the coming years, but warned that there is still a "significant gap" in costs between green hydrogen and existing, carbon intensive sources.
"Governments across Europe have set out ambitious plans for hydrogen to drive the decarbonisation of industry and other parts of the economy, but electrolyser projects are still held back by red tape combined with a lack of specific policies and incentives," he added.