Market for electrolyzers – the global race begins


In its “World Energy Transition Outlook 2022”, the International Renewable Energy Agency (IRENA) predicts that the costs of electrolysers will fall at a similar rate to solar panels and wind turbines by 2030. Between 2010 and 2019, the cost of solar panels fell by 82 percent and onshore wind costs by 39 percent. A key factor in reducing the cost of green hydrogen is the industrialization of electrolyser production. Now that the EU Commission has announced that it will significantly increase the hydrogen targets, the manufacturing industry for electrolysers is also stepping up the pace.

Two of Europe’s best-known electrolyser manufacturers have announced investments of around 250 million US dollars to finance factory expansions. The Norwegian company Nel, which manufactures alkaline and PEM electrolyzers, has raised 174 million US dollars from investors and Sunfire has also secured further growth capital of 68 million US dollars via its Copenhagen Infrastructure Energy Transition Fund I (CIP). CIP is one of the world’s largest project developers for renewable energies and is active in areas such as offshore wind power, energy storage and Power-to-X.

In the coming years, CIP plans to purchase pressurized alkaline electrolysers with a total output of up to 640 MW and use them in its multi-GW projects throughout Europe. Sunfire produces industrial electrolysers based on alkali and solid oxide technologies and employs more than 370 people at sites in Germany and Switzerland. Volkswagen also wants to become a leading global player in hydrogen electrolysers and has announced its intention to invest 500 million euros in this area. The global race for the hydrogen market has begun.

According to a recent report by BloombergNEF, Chinese manufacturers of electrolysers are said to have started exporting alkaline systems to the USA and Europe, which are four times cheaper than Western equivalents. In the more innovative technologies such as PEM, solid oxide or alkaline pressurized electrolysers, European manufacturers continue to lead the way. A rapid fall in the price of electrolysers is important if global warming is to be stopped. According to IRENA, annual production of more than 100 million tons of green hydrogen is needed by 2030 and more than 400 million tons by 2050 if global warming is to be kept to 1.5° C above pre-industrial levels. However, this will not be possible without sufficient cheap electricity from renewable sources.

As unfortunate and tragic as the war in Ukraine is, the issue of energy security is now bringing hydrogen technologies increasingly into the strategic focus.

Doris Höflich, Market Intelligence Senior Expert