Dive Brief:
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Global electrolyzer manufacturing for green hydrogen is on pace to hit 54 GW by 2027, potentially exceeding demand for the equipment two times over by 2030, according to a report by clean energy advisory firm Clean Energy Associates.
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However, it remains uncertain whether all the factories currently announced will ultimately be built, according to George Touloupas, senior director of technology and quality for solar, storage and green hydrogen at Denver-based Clean Energy Associates.
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Uncertainty about the criteria for clean hydrogen production tax credits — and about the industry's trajectory in general — mean any industry forecast is “necessarily cloudy,” said Jason Mortimer, senior vice president of global sales for electrolyzer manufacturer Electric Hydrogen (EH2).
Dive Insight:
Green hydrogen is still a budding industry, and that means it's still unclear how quickly it will grow — and how large it will ultimately get, according to Clean Energy Associates.
Based on nameplate announcements to date, electrolyzer manufacturing capacity could eventually outstrip demand from hydrogen producers, Touloupas said. But whether that happens in reality, he said, will depend on the ability of manufacturers to realize their expansion plans, and on how fast the hydrogen industry actually grows. Many clean hydrogen projects are on hold pending the finalization of rules for qualifying for clean hydrogen production tax credits by the U.S. Treasury.
Because the ultimate cost of hydrogen production will depend on these rules, Touloupas said, “investment decisions cannot be made until then, including for building electrolyzer manufacturing plants.”
The report's conclusions mirror what EH2 is seeing in the industry, Mortimer said. While some of their customers are moving ahead with their projects regardless of the final rule, others have pushed pause, he said.
Even so, EH2 already has 5 GW of orders lined up for their 1.3 GW factory, so EH2 feels confident about its ability to keep its current facility busy. The company is also contemplating building a second factory, Mortimer said.
Mortimer said he believes that hydrogen, like solar, will eventually mature and become a stable, well-recognized industry. Until then, it's likely that the first round of electrolyzer factories will struggle to line up customers or financing — which means that some portion of the currently announced manufacturing projects may not be built.
“Green hydrogen is not a thing yet,” he said. “We are making it a thing, and there's all kinds of challenges associated with that, but it is happening.”
