H2Tech Market Data 2023 - 43

gy Agency (IEA), green H2 from electrolysis will become
cost-competitive with other fossil fuel-based H2
adoption of green H2
production
pathways by 2030. At the time of this publication,
green H2
is 2-3 times more expensive than blue H2
is essential for sectors like heavy-du.
The
ty transportation, shipping, aviation and other industries
where energy intensity is high and emissions are difficult
to abate. Although electrolyzer sales are forecast to quadruple
during 2022-2023 vs. 2021-2022, this progress
may fall short of what is needed for net-zero emissions by
2050. Therefore, imperative measures to accelerate growth
in green H2
scale-up of projects and infrastructure development, all of
which must be supported by government policies.
Despite a significant decrease in electrolyzer cost
over the past few years, challenges persist to reach the
IEA's projected cost of $1.30/kg or the Earthshot's goal
of $1/kg of H2
. The industry must continue to follow a
multi-pronged approach to make green H2 affordable by
developing improved technological efficiency and reliability,
manufacturing economies of scale, access to lowcost
clean renewable energy, government support in the
form of policy, decarbonization mandates and investment
incentives, among others.
As such, a continued emphasis is placed on reducing
equipment costs and the overall cost of green H2
. Several
key factors impacting the cost of electrolyzer equipment
and the overall cost of green H2
production in the next year
will be discussed here.
Technological innovation and development will continue
to drive down electrolyzer costs while optimizing
performance. As evident in TABLE 1, each electrolyzer
technology has its own challenges ranging from material
costs and durability to maturity and performance. This
enables all technologies to be susceptible to market
dynamics and competition, which, in turn, drives innovation
and cost reduction. Alkaline electrolyers have the
lowest installed cost, while proton exchange membrane
(PEM) electrolyzers have higher current density and
output pressure at a lower footprint. Alkaline and PEM
systems are the most mature technologies, while AEM
and solid oxide electrolysis cell (SOEC) electrolyzers have
distinct advantages of material costs and high energy
efficiency, respectively. Innovation and mass deployment
of different technologies will gradually close the cost and
performance gap to convergence.
Ongoing electrolyzer research focuses on improving
durability to enhance equipment lifetime and achieve a low
cost per unit of H2
produced, reducing cost by standardizing
manufacturing and design for industrial scale-up, and
improving efficiency to lower the cost of electricity required
per unit of H2
produced. Electrolyzer manufacturers are
via electrolysis include demand creation, the
changing their designs to produce more throughput from
less cell materials, resulting in a lower capital cost. The
focus is on making H2
affordable by engineering solutions
for materials used in manufacturing to the costs of daily
operation. Electrolyzers equipment costs are declining with:
* The use of earth-abundant materials of construction
* Patented membrane technologies created from
commodity materials that help maintain a low cost
but high performance and efficiencies
* Designing innovations that enable smooth ramp
cycles and responses to intermittent electricity
from solar arrays or wind farms
* Scalable, customizable stacks/modules
for various applications.
Increasing module sizes and the size of plants deployed
will significantly impact the overall cost of H2
. Augmenting
the size of plants from 1 MW to 20 MW will reduce costs by
30%, which is already being seen with several new plants
commissioned in 2022. Additionally, optimal system design
will be essential, depending on the application that drives
system performance for the best efficiency and flexibility.
Throughout 2021-2022, several manufacturers
announced significant equipment cost reductions achieved
through more compact and efficient stacks and modular
system design. For example, one company announced
a manufacturing upheaval to significantly lower energy
requirements (kWh/Nm3
of H2
), while another switched to
series production and reduced costs by 30%. Through process
engineering and optimization, one of the leading electrolyzer
manufacturers reported achieving a 5% reduction in
energy consumption by reducing the size of the equipment
by 4.5 cm. Several companies touted their basic design as a
building block for customized capacity and system integrators
for quickly realizing changing market requirements and
ramp-ups. Besides scale-up of manufacturing, the digitalization
of operations is also playing a pivotal role in bringing
down manufacturing costs for electrolyzers.
Rising cost of commodities such as nickel, platinum and
iridium will have upside implications for electrolyzer costs.
The most mature electrolysis technologies are alkaline and
PEM electrolysis. PEM electrolyzers use platinum and iridium
as raw materials for electrocatalysts. Iridium prices rose
in the wake of COVID-19 and have shown another uptick in
the past year (FIG. 1). Platinum prices could be significantly
impacted by the increasing sanctions on Russia, a significant
producer of the metal (FIG. 2). Alkaline electrolyzers
typically use nickel as electrode raw material. Nickel prices
also increased during 2022. The cost of these metals can
impact capital expenditures in the electrolyzer industry.
Current production of iridium and platinum is projected
to support 3 GW-8 GW of annual manufacturing capacity
FIG. 1. Iridium prices, $/troy oz. Source: Bloomberg
FIG. 2. Platinum prices, $/oz. Source: Bloomberg.
43
MARKET DATA 2023 | H2
-Tech.com
H2 TECHNOLOGIES
http://www.h2-Tech.com
H2Tech Market Data 2023

Table of Contents for the Digital Edition of H2Tech Market Data 2023
