Hydrogen electrolyser factories are only operating at 10% capacity on average: BNEF
Idling production lines come despite a threefold increase in renewable H2 investment in 2023
Electrolyser factories built to supply machines for green hydrogen projects are on average operating at 10% of their nameplate capacity — with the lowest utilisation in mainland China, analysis from research house BloombergNEF (BNEF) has revealed.
This is largely because market demand is “undershooting” manufacturer’s expectations on the back of delays to green hydrogen projects, despite investments in both clean H2 and electrolysers tripling in 2023, BNEF said in its new Energy Transition Investment Trends Report 2023.
Investment by green hydrogen project developers in electrolysers alone — not counting the capital manufacturers have spent building out capacity — has ballooned from $2.6bn to $8.7bn, on the back of 7GW of positive investment decisions and project construction in 2023, BNEF said.
These include the 2.2GW Neom project in Saudi Arabia, the 700MW H2 Green Steel scheme in Sweden and 1.7GW of projects in China more generally, alongside larger projects the research house tracked in the US, France and Germany.
Spending on electrolyser manufacturing capacity also tripled, to $1.6bn.
And, overall, spending on clean hydrogen projects — including blue hydrogen made with fossil gas and carbon capture and storage — tripled to $10.4bn in 2023, most of it in the Middle East and Europe.
Nevertheless, underutilisation of electrolyser factories is “universal” across all manufacturers globally, BNEF said.