May 15, 2023 • Paul Rodden • Season: 2023 • Episode: 214
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In episode 214, The hydrogen Council releases their 2023 Hydrogen insights. I'll go through the press release and the first half of the report on today's hydrogen podcast.
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The hydrogen Council releases their 2023 Hydrogen insights. I'll go through the press release and the first half of the report on today's hydrogen podcast.
So the big questions in the energy industry today are, how is hydrogen the primary driving force behind the evolution of energy? Where is capital being deployed for hydrogen projects globally? And where are the best investment opportunities for early adopters who recognize the importance of hydrogen? I will address the critical issues and give you the information you need to deploy capital. Those are the questions that will unlock the potential of hydrogen, and this podcast will give you the answers. My name is Paul Rodden, and welcome to the hydrogen podcast.
In a press release on May 11, the hydrogen Council announced their hydrogen insights for 2023. Here's the press release. The global hydrogen economy remains robust and growing from the project pipeline to deployment according to an analysis of more than 1000 projects published today by the hydrogen Council. Hydrogen insights 2023. The latest update on the global hydrogen economy from the hydrogen Council and McKinsey and Company highlights strong growth across the project funnel, with total investments increasing by 35% from May of 2022 to January of 2023. 9% of total investments have reached final investment decision up by 30% since May of 2022. The report tracks 1040 projects globally representing $320 billion in direct investment in between now and 2030, up from 240 billion. Approximately half of the projects are focused on large scale industrial applications, with the next largest segment 20% related to mobility in mobility more than 1000 refueling stations are now in operation globally.
Total announced electrolyzer capacity stands at 230 gigawatts and 2030 momentum is spread globally with Europe leading and announcements while North America leads with committed investments up to $10 billion Europe at 7 billion and China at 5 billion follow with growth in China being the highest at more than 200%. The industry is maturing during a time of strong headwinds, which could slow deployment including strained supply chains, labor shortage, energy performance, contracting capacity, increased inflation and interest rates and permitting delays. Despite progress committed projects lag behind targets by 2030. An increase of more than 20 fold would be required to track towards Net Zero objectives. resources and equipment needs remain critical to ensure deployment of clean hydrogen supply projects, prevent infrastructure bottlenecks, and enable hydrogen ready end user plants. Okay, so I would like to go through some of the exhibits in the report that I think are the most critical for this audience.
The first is exhibit one, hydrogen momentum is strong more than 1000 project proposals have been announced globally. Globally, the industry has announced more than 1000 large scale project proposals as of the end of January 2023. Since the previous publication, more than 350 new proposals have been announced of the total 795 aim to be fully or partially commissioned through 2030 and represent total investments of up to $320 billion US of direct investments in the hydrogen value chains through 2030. From 240 billion. Europe remains the global leader in hydrogen project proposals with the highest total investment, that being 117 billion US dollars or 35% of global investments, and highest absolute growth. $40 billion. Latin America and North America follow Europe each representing about 15% of announced investments.
Growth in North America increased following the announcement of the IRA and Giga scale project proposals that being proposals over one gigawatt of electrolysis for renewable hydrogen supply or more than 200,000 kilotons per year of low carbon hydrogen account for 112 project proposals requiring about 150 billion US dollars in of investment until 2030. nearly doubling from 61 eight months ago. Now of these 112 proposals 91 are renewable and 21 are low carbon hydrogen. Momentum is strong, and the industry is planning investments into clean hydrogen yet much more needs to be done to be on track to net zero and 2050. More than a doubling of announced investments is needed by 2030. And these need to be matured and deployed.
Now exhibit two the project funnel is growing across project stages yet remains skewed towards announcements. Total announced investments until 2030 have increased by 35% in the past eight months from 240 billion dollars to 320 billion. All project maturity stages have grown by 30 to 40%, yet remain heavily skewed toward early stage projects. Almost half of the projects are announced, but have not yet entered the planning stage received government funding are in advanced planning or have taken fid. Overall investments in the committed category have accelerated. They grew only 10% From September of 2021 to May 2022 and 30% from May of 2022 until January of this year, and the first large scale projects have achieved fid in the last months. While Europe leads on announcements North America leads with committed investments, that being 10 billion US dollars, Europe at 7 billion in the Middle East at 5 billion and China at 5 billion follow, with growth in China being the highest at more than 200% Three important projects of common European interest for developers to take fid securing offtake and potentially government funding is key.
Most projects at or past fit have either captive offtake or developed by companies with internal demand for hydrogen or long term off take contracts. In terms of government funding. The largest schemes are IPC e i three in Europe at 10 Point 6 billion euros granted in the first two rounds, the production tax credits the 45 V and credits for carbon capture and storage the 45 Q in the US and Japan and South Korea funding has supported infrastructure build out such as refueling stations liquid hydrogen value chain in Japan, where as hydrogen clusters have received government funding in China. Despite a positive trend less than 10% of the $320 billion US announced investments through 2030 are real committed capital. The industry is maturing in strained supply chains, labor shortage, increased inflation and interest rates and lack of public support in many markets, all of which may slow deployment. By 2030, committed capital must increase by more than 20 fold to track a net zero scenario. And so for this to result in clean hydrogen deployment, the resources and equipment must be available to ensure deployment of clean hydrogen supply projects prevent infrastructure bottlenecks and enable hydrogen ready in user plants.
Next is exhibit eight deployment is steadily growing across the value chain however, acceleration is needed to be on track to net zero. About 800 kilotons per year clean hydrogen supply is operational globally, up from about 700 About 740 kilo tons per year are low carbon hydrogen primarily in North America and the remainder is renewable. In addition to this volume about 2 million tons per year has passed fid, of which more than half is low carbon hydrogen. What about infrastructure, infrastructure deployment is progressing and is critical to ensuring low cost clean hydrogen supply matches the demand. Committed investments in hydrogen infrastructure have grown from about 5 billion US dollars to 7 billion, of which more than three quarters are in Asia.
And what about hydrogen end use or off takers, committed investments into hydrogen in uses increased by about $500 million. With the most growth in North America within mobility cumulative FCEVs sales now stand at about 80,000 vehicles up 30% representing annual sales of about 17,000 vehicles in 2022. less than 1% of global vehicle sales. Vehicle OEMs have announced more than 130 Fuel Cell Eevee models expected to be assembled in 2023, of which the majority consists of commercial vehicles like trucks and buses in China. And so what about manufacturing capacity? Electrolyzers and fuel cell manufacturers are readying for scaling up this according to OEM statements growth in electrolyzer manufacturing capacity has reached nearly nine gigawatts, a growth of 150%. For fuel cell manufacturing, the total global capacity stated by OEMs stands at 12 gigawatts with Japan and South Korea as the largest supply markets.
Okay, so I'm gonna go ahead and stop with my review of the hydrogen insights for 2023 here and continue on in the next podcast and review really what I think are even more critical components of these insights that this report has in the second half. But just reviewing these first few exhibits, and the numbers released in the press release, it's going to be very interesting to see and hear what the global reaction to this report is going to be. Now don't miss the next episode when I dive into the second half of this report and really give a more in depth review on these numbers and what I think that means for the next few years in the hydrogen space, but for now, that's it for me now.
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