WEMO24-Compiled Report-Interactive compressed (002) 4154-7882-8116 v.1 - Flipbook - Page 21
Global
Outlook
By the end of 2023, China’s installed electrolyser capacity
reached 1.2 GW – 50% of global capacity84 – with another new
world record-size electrolysis project (Kuqa plant, 260 MW),
which started operation. This Kuqa plant operated by Sinopec
is expected to produce 20,000 tonnes of low-carbon hydrogen
per year.
The conditions for the green hydrogen development are:
• Technology improvement: in 2023 and early 2024 low emission
hydrogen production in Europe and China encountered
difficulties linked to malfunctioning electrolysers. Even
alkaline, the most advanced technology (50% of current
production), had unexpected failures when the electrical
load rate was in below 40%. Unfortunately, this means that
today electrolysers cannot use directly over abundant green
electricity as the latter is available intermittently.
83 Low emission hydrogen is produced by water electrolysis using either electricity produced by
renewables (green hydrogen) or nuclear electricity.
84 In 2023, 50% of world’s hydrogen installed capacity was in China, 25% in Europe and 10.5% in
the U.S.
• Lowering low emissions hydrogen costs is essential for its
development.
In 2023, grey hydrogen86 LCOE varied between $0.98-$2.93/
kg; for green hydrogen it was between $4.5-$12/kg.87
In Europe, TotalEnergies has launched a call for tenders
for 500,000 tonnes of renewable hydrogen for use in its
refineries. The price obtained was €8/ kg.88 However, thanks
to subsidies this was an acceptable price.89
Cost reduction should come from the drop in the price of
low-carbon electricity and the reduction in the capital and
operational cost of electrolysers.
• The cost of electrolyzers drop could come, as for renewables
and batteries, from mass production but presently the
large electrolyzers plants have difficulties, and the market
is not yet there (see below).
The difficulties of green hydrogen cost decrease are
confirmed by ”Futurible” study mid-March, 202491
that concludes that cost reductions are insufficient
to significantly narrow the competitiveness gap with
grey hydrogen.
• The cost of electricity used: After the huge drop of
renewable costs these last ten years, wind and solar
electricity generation costs decrease will be limited, and
85 The plant should now not exceed 40MW of capacity instead of the planned 120MW.
86 Grey hydrogen is produced by gas -methane- reforming
87 https://about.bnef.com/blog/green-hydrogen-to-undercut-gray-sibling-by-end-of-decade/
88 According to Patrick Pouyanné April 2024 Ryad economic forum
89 If a refinery uses green hydrogen and replaces its grey hydrogen not only will it avoid paying
emission rights but it will get EU CO2 emissions free allowances that it can trade.
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costs from new nuclear plants are higher than that of
existing ones.
However, with the increase of the intermittent renewable
rate in the electricity mix, the number of hours when this
electricity is curtailed will increase. If electrolysers plants
are collocated with renewable plants, they could use this
free electricity and green hydrogen cost would decrease
significantly. Unfortunately, today electrolysers have
difficulties to operate with a variable electricity load90
that also reduces their lifetime.
WEMO 2024
Green hydrogen allows long term electricity storage in fuel
cells, but its usage is focused at achieving industrial and
transportation sectors decarbonization.
Global hydrogen use reached 95 Mt in 2022, a nearly 3% increase
year-on-year, low-emission hydrogen83 accounting for just 0.7%
of total hydrogen demand
It is because of the poor function of the John Cockerill
electrolysers, that the French, Masshylia green hydrogen
megaproject, from TotalEnergies and Engie has been revised
downwards.85
At this stage, most manufacturers encounter similar
difficulties. Other problems are linked to increase of the
size of the electrolysers, which is evocative of the problems
encountered by other young industries.
90 It seems that they cannot function if the electricity input is below 40% of the nominal input.
91 https://www.futuribles.com/
hydrogene-bas-carbone-perspectives-de-deploiement-a-lhorizon-2050/
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