Electrolyzer Market: A Modest Spark with Potential to Ignite
3 min readMay 8, 2024
The electrolyzer market, despite its current size of USD 390.4 million (2021), holds promise for future growth. Fortune Business Insights predicts a CAGR of 5.8% by 2029, reaching USD 619.6 million. This market offers a clean technology for hydrogen production, a key player in the transition to renewable energy.
Market Challenges:
- COVID-19 Impact: Supply chain disruptions during the pandemic hampered the market, impacting industries like oil refining and steel manufacturing that rely on hydrogen.
- High Electricity Costs: Electrolysis currently faces competition from declining costs of solar and wind power, impacting the perceived affordability of hydrogen production.
Market Drivers:
- Green Hydrogen Push in Asia Pacific: Governments in this region, like India and China, are investing heavily in hydrogen production and storage technologies for power generation and transportation.
- Large-Scale Projects: Developments like Asahi Kasei’s 10 MW alkaline water electrolysis system for Japan’s Fukushima Hydrogen Research Field showcase advancements in large-scale, efficient hydrogen production.
- Government Support: Initiatives like NEDO’s Hydrogen from Renewable Energy Project demonstrate government backing for research and development in this field.
Competitive Landscape:
- Strategic Acquisitions: Companies like Man Energy Solutions are investing heavily in subsidiaries like H-Tec Systems to ramp up production of PEM electrolyzers, a key technology.
- Focus on Innovation: Leading players are constantly innovating. Green Hydrogen Systems and Next Hydrogen are examples of companies pushing the boundaries of this technology.
Regional Breakdown:
- North American Dominance: The region currently holds the largest market share due to high hydrogen demand in various sectors like manufacturing and power generation.
- Power Plants Leading Application: In 2021, power plants were the primary application for electrolyzers, accounting for over 26% of the market share. This highlights the role hydrogen can play in clean energy production.
Beyond the Report:
While the current growth forecast might seem modest, the electrolyzer market is at a tipping point. With increasing environmental concerns and advancements in technology, the demand for clean hydrogen production is expected to surge. This market has the potential to become a crucial driver in the global shift towards renewable energy sources.
Additional Points to Consider:
- The report highlights two main electrolyzer types — alkaline and PEM. Exploring the advantages and limitations of each type would add value.
- Discussing the role of electrolyzers in sectors like transportation (fuel cell vehicles) and energy storage (power-to-gas) could provide a broader market perspective.
- Mentioning the environmental benefits of hydrogen compared to traditional fossil fuels would further emphasize the market’s potential impact.
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