Green hydrogen is set to play a substantive role in the overall energy mix with its development likely to happen faster than anyone predicts, according to a new report by Wood Mackenzie.
The 2050: The Hydrogen Possibility report details how the project pipeline has grown nine-fold since October 2019 to a staggering 26 gigawatts. National hydrogen strategies has set targets for 66 GW of electrolyzer capacity suggesting there is plenty more growth to come.
Last month, the electrolyzer manufacturer Nel set a target of $1.5 per kilogram by 2025, a price level that would beat the traditional fossil fuel-based options. The current price is more like $4/kg.
Predictions on when green hydrogen might be competitive with existing high-carbon production methods keep accelerating. “This is going move faster than anyone forecasts, even us. But that’s just the nature of this, because this is so dynamic,” Ben Gallagher, senior analyst at Wood Mackenzie and author of the report, said in an interview.
The EU is targeting 40 GW of electrolyzer deployment by 2030. France is eying 6.5 GW and both the U.K. and Germany have set their own 5 GW goals too. At the same time, major utilities like RWE and Iberdrola have joined oil majors Shell, BP and Total in developing substantial early-stage green hydrogen projects.
“The European Commission’s hydrogen strategy didn’t exist a year ago. The German strategy didn’t exist a year ago, or the Netherlands’, Spain, Portugal […] China didn’t have a 2060 net-zero goal,” said Gallagher. The shift in U.S. leadership, with President Joe Biden and Vice President Kamala Harris pledging aggressive action on decarbonizing the world’s largest economy, would contribute too, he said.