Demand For Green Hydrogen to Drive Global Electrolyzers Market

Electrolyzers Market

An electrolyzer system utilizes electricity to break water molecules into hydrogen and oxygen. Through this process, the electrolyzer system produces hydrogen, and the leftover oxygen is released into the atmosphere or can be captured or stored to supply other industrial processes or even medical gases, in some cases. There are four main ways that electrolyzers can be commercialized: power to mobility, power to fuel, power to industry, and power to gas.

The global electrolyzers market is estimated to be worth USD 1,234.9 million in 2023 and is projected to reach USD 23,555.9 million by 2028, growing at a CAGR of 80.3% during the forecast period.

When hydrogen is burned, it produces water vapor and not CO2. Hence, decarbonizing the hydrogen production process is an important milestone in achieving carbon neutrality. Currently, hydrogen is produced from steam methane reforming (SMR), coal gasification, and partial oxidation (POX).  In SMR, methane combines with steam at pressures ranging from 3 bars to 25 bars (1 bar = 14.5 psi) to produce hydrogen, carbon monoxide, and a small quantity of carbon dioxide. In coal gasification, coal and water are turned into syngas, a mixture of carbon monoxide (CO), hydrogen (H2), carbon dioxide (CO2), methane (CH4), and water vapor (H2O). In the partial oxidation process, hydrogen and carbon monoxide are produced when the oxygen supply is lower than required for complete oxidation. Methane and other hydrocarbons in natural gas undergo POX when they interact with a small amount of oxygen, often from the air, which is insufficient to oxidize the hydrocarbons into carbon dioxide and water.

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The above processes use fossil fuels as feedstock and produce carbon emissions, whereas using electrolyzers for hydrogen production use water as feedstock and do not emit greenhouse gases. The simplest electrolysis method transforms water into hydrogen and oxygen by placing two electrodes in it and running an electrical current through them. Other than hydrogen and oxygen, electrolysis does not emit or produce any by-products. Renewable, nuclear, or fossil fuels can all be used to provide the electricity needed for electrolysis. If the electricity required to generate hydrogen via electrolysis uses renewable sources, the generated hydrogen is clean and is termed green hydrogen. Therefore, electrolyzers play a vital role in achieving a cleaner energy future. The green hydrogen produced from the electrolyzer is used in several applications, such as energy, mobility, industrial, and grid injection.

Electrolyzers are available in small and large sizes. Small-capacity electrolyzers are used for small-scale distributed hydrogen production. In the case of large-capacity electrolyzers, hydrogen production facilities can be tied directly to renewable or other non-greenhouse-gas-emitting forms of electricity production. Electricity prices play an important role in the electrolysis process. Low-cost, high-capacity electrolyzers are a key technology that can support the greater deployment of zero-carbon hydrogen for various applications and represents a technology that can potentially facilitate the integration of greater renewable energy sources. In the past decade, the cost of producing renewable energy from all sources has reduced drastically. As per IEA, supply chain challenges and rising commodity costs in 2021 did not result in higher total installed renewable energy project costs. Additionally, due to falling prices in China, the global weighted average cost of electricity from utility-scale solar PV and onshore and offshore wind projects commissioned in 2021 also fell. Moreover, 2010 to 2021 saw a seismic shift in the competitiveness balance between renewables, fossil fuel, and nuclear options. Therefore, the decline in the cost of electricity derived from renewable energy sources is driving the growth of the electrolyzer market.

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Some of the key players in the Electrolyzers Market are Cummins Inc. (US), Siemens Energy (Germany), Nel ASA (Norway), Plug Power Inc. (US), and Enapter S.r.l. (Italy).