Green Hydrogen Pipeline Surges on a Wave of Announced Mega

The pipeline of electrolyzer projects destined to produce hydrogen from renewable energy has nearly tripled in just five months, according to Wood Mackenzie. The analyst firm has updated the green hydrogen figures it released in a report last October, following an avalanche of new project announcements.

In its first report, titled Green Hydrogen Production: Landscape, Projects and Costs, Wood Mackenzie Power & Renewables counted 3.2 gigawatts of planned electrolyzer capacity, a twelvefold increase over the cumulative installed capacity at the time. As of March 2020, that pipeline had increased to 8.2 gigawatts, or 31 times the cumulative installed capacity today.

In particular, recent months have seen a big leap in the number of projects clocking in at 100 megawatts or higher. There are 17 of these now under development around the world, with mega-plants slated for Australia, France, Germany, the Netherlands, Paraguay, Portugal, the U.K. and the U.S.

“We are seeing larger and larger projects announced with backing from Fortune 500 companies,” commented Ben Gallagher, a subject-matter expert in carbon and emerging technology for Wood Mackenzie's Energy Transition practice.

The most ambitious of the plans being tracked by Wood Mackenzie is the Asian Renewable Energy Hub in the Pilbara region of Australia. Billed by backers as “one of the most exciting energy projects in the world,” it is set to have up to 15 gigawatts of wind and solar generation capacity, 12 gigawatts of which will be dedicated to green hydrogen production. WoodMac estimates the hub will have 1 gigawatt of electrolysis capacity upon completion in 2027.

Another massive project slated for completion by 2027 is the HyGreen Provence plant being built by Engie and Air Liquide in France. Wood Mackenzie puts the project’s electrolysis capacity at 760 megawatts.

Press reports state the HyGreen Provence project will move forward in three phases, generating 306 tons of green hydrogen a year from 120 megawatts of solar in 2023, then increasing to 3,360 tons of hydrogen from 440 megawatts of PV by 2026 and 11,508 tons from 900 megawatts by 2030.

A similar-sized project is taking shape in Eemshaven in the northern Netherlands. Called NortH2, the Shell-backed venture will see 10 gigawatts of offshore wind being used to power an estimated 750 megawatts of electrolyzer capacity.

Feasibility studies for the project will begin this year, with hydrogen production set to start by 2027 and a second phase slated for completion by 2040.

Beyond these hydrogen mega-projects, Paraguay is also gunning to enter the 100+ megawatt club with a 310-megawatt-capacity ThyssenKrupp electrolyzer linked to a renewable diesel plant planned by ECB Group slated for operation in 2022.

Based on these recent announcements, Wood Mackenzie has upped its electrolyzer capacity estimates. “Our 2020 forecast remains practically unchanged, but it is in the mid- to late 2020s where we see a material shift in the outlook,” said Gallagher.

In its October 2019 forecast, WoodMac did not foresee any capacity additions at all after 2025. Now it is predicting more than 4.5 gigawatts of new capacity in the second half of the decade, including almost 1.5 gigawatts where the commissioning date is still unknown.

As well as massive increases in total capacity, the second half of the decade is likely to be characterized by significant growth in the size of individual projects. By 2027, Wood Mackenzie predicts, the average size of electrolyzer systems will exceed 600 megawatts.

While the U.S. looks set to make important contributions to the green hydrogen race from 2021 through to 2025, based on the announcements to date, the lion’s share of electrolyzer capacity worldwide will be in Australia and France by 2030.

And for the next decade, net-zero targets will drive electrolyzer capacity additions mostly in Europe, which accounts for 59 percent of all projects listed by Wood Mackenzie from 2020 to 2030.

Wood Mackenzie’s research shows the extent to which corporate interest in green hydrogen is growing. This month saw another major green hydrogen initiative in the form of a collaboration between Siemens Gas and Power and the European energy giant Uniper.

The agreement will see Siemens helping Uniper to build new green hydrogen projects and potentially converting existing turbines and storage facilities to use the gas.

“We are ready to invest and have set the strategic course to significantly accelerate the decarbonization of our portfolio,” said Uniper CEO Andreas Schierenbeck in a press release.

Naturally, though, it remains to be seen whether all these projects will ever make it off the drawing board.

Wood Mackenzie cautions that some of the announced projects may not be seen as bankable, and several gigawatts' worth of electrolyzer manufacturing capacity will need to be ramped up quickly to provide enough products for the plants that have been proposed.

Last but not least, the plans listed by Wood Mackenzie all represent pre-coronavirus ambitions. “If the economic impact of global lockdown results in a severe recession or depression, then all sectors will be impacted,” said Gallagher.

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Learn more about Wood Mackenzie's latest green hydrogen research here.