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IEA: Global Hydrogen Energy Progress Report released, green hydrogen technology development urgently needed

Demand for pure hydrogen is around 70 Mt per year, mostly for oil refining and chemical production. This hydrogen currently is produced from natural gas and coal, and associated CO2 emissions are significant.

Clean energy progress for hydrogen can be tracked using three main indicators:

  • the extent to which low-carbon hydrogen production replaces conventional hydrogen in existing industrial applications.

  • demand in new sectors (e.g. some transport and industrial applications, gas grid injection and electricity storage), where characteristics such as storability and a lack of harmful emissions occurring from its use make it a leading clean-energy vector.

  • scale-up, cost reductions and improvements (in efficiency, lifetime and process integration) of cross-cutting technologies such as electrolysers, fuel cells and hydrogen production with carbon capture and utilization or storage (CCUS).

Key indicators to track clean energy progress on hydrogen

Developing low-carbon hydrogen production routes is critical for hydrogen to aid in clean energy transitions. Most hydrogen is currently produced through emissions-intensive natural gas reforming and coal gasification.

The two main low-carbon production routes involve: coupling conventional technologies with CCUS; and generating hydrogen through water electrolysis.

Coupling conventional technologies with CCUS is still the main route for low-carbon hydrogen production and will likely remain so in the short to medium term because production costs are lower than for other low-carbon technologies such as electrolysis.

Interest in projects that combine conventional technologies with CCUS is growing. Six projects, with a total annual production of 350 000 tonnes of low-carbon hydrogen, were in operation at the end of 2019, and more than 20 new projects have been announced for commissioning in the 2020s, mostly in countries surrounding the North Sea.

Electrolysers enable the production of clean hydrogen from low-carbon electricity and water. While electrolysers are a well-known and long-used technology in a variety of industrial sectors, the fastest-growing market is for uses that serve energy and climate objectives: vehicle fuelling; hydrogen injection into the gas grid; using hydrogen as a cleaner input for industrial processes; electricity storage; and synthetic fuel manufacturing.

In recent years, the number of projects and installed electrolyser capacity have expanded considerably, from less than 1 MW in 2010 to more than 25 MW in 2019. Furthermore, project size has increased significantly: most projects in the early 2010s were below 0.5 MW, while the largest in 2017-19 were 6 MW and others fell into the 1 MW to 5 MW range.

In March 2020, a 10 MW project started operation in Japan, and a 20‑MW project in Canada is under construction. Plus, there have been several announcements for developments in the order of hundreds of MWs that should begin operating in the early 2020s (see the IEA hydrogen project database).

As alkaline electrolysers are the most mature electrolysis technology, they dominate the market, especially for large-scale projects (both already operational and announced).

However, many new projects are now opting for polymer electrolyte membrane (PEM) designs. PEM electrolysers are at an earlier stage of development than alkaline electrolysers, but they can operate more flexibly and are therefore more compatible with variable renewable electricity generation.

Projects involving high-efficiency solid oxide electrolyser cells (SOECs) are also beginning to be announced, nearly all of them in Europe to produce synthetic hydrocarbons. However, electrolyser users remain divided over whether the operational benefits of PEMs (flexibility) and SOECs (efficiency) are worth the additional costs compared with alkaline electrolysers. 

Low-carbon hydrogen production is ramping up, especially using electrolysis

Global electrolysis capacity becoming operational annually, 2014-2023, historical and announced

Capacity additions (MW/y)
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