The global hydrogen electrolyser market is forecast to mushroom “one-thousand-fold” by 2040, with some 213.5GW of projects on the slate for development by 2040 driven by a bullish, fast-emerging European play, according to a new report from Aurora Energy Research.

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The UK analyst highlights a pipeline of over 9GW in Germany, 6GW in the Netherlands, and 4GW in Britain, all scheduled to be operational by the end of the decade, that will catalyse rapid growth from the current global electrolyser capacity, some 200MW.

Aurora’s global energy markets lead, Anise Ganbold, said: “Companies are already betting on the hydrogen economy by investing in projects now. The pipeline of electrolysers is over 200GW, which is one thousand times the current installed capacity.

“If all of this capacity were to come online, it could produce up to 32 million tonnes of hydrogen per year, already half of today’s hydrogen demand.”

The analyst noted that electrolyser projects are scaling up “very quickly” as the technology and supply chain matures, with expectations that the average size of 1-10MWs will be supplanted by “typical” projects of 100-500MWs by 2024, to supply ‘local clusters’.

Most projects included in Aurora’s calculations are set to use wind power, followed by solar, with “a large portion” of the electrolysers earmarked for end users in heavy industry.

Richard Howard, Aurora’s research director, added: “The growth of the hydrogen electrolyser pipeline is an early indication of the rapid rollout of hydrogen infrastructure that we are likely to see in the coming years.

“However, there remains a significant gap in costs between ‘green’ hydrogen production from electrolysers, and existing, carbon intensive hydrogen sources. Governments across Europe have set out ambitious plans for hydrogen to drive the decarbonisation of industry and other parts of the economy, but electrolyser projects are still held back by red tape combined with a lack of specific policies and incentives.”

Aurora identifies the “key success factors” for green – that is, renewables-fuelled – hydrogen from electrolysers as coming down to “the cost and carbon footprint “of electricity, adding “hydrogen made directly from renewable energy rather than the power grid can achieve the lowest carbon footprint – and this may be the only type of hydrogen that can meet the carbon intensity thresholds set by the EU”

The EU is targeting 40GW of electrolyser capacity by 2030, and national governments in Europe combined have already pledged a total of 34GW by the same date.