About $130 billion will be spent on electrolysers as installations grow a whopping 120-fold to 242 gigawatts (GW) by end of the decade, according to a recent statement by BloombergNEF.

“Green hydrogen is entering hockey stick territory: the point where it sees a sudden and sharp turn upward”, leading to a boom in the demand and supply of electrolysers, it said.

“Total electrolyser manufacturing capacity is seen more than doubling just next year, with alkaline systems (ALK) maintaining their lead over the alternative proton exchange membrane, or PEM, electrolysers.”

Companies like Longi Green Technology, John Cockerill, Plug Power, ITM Power and ThyssenKrupp are leading the manufacturing, said BNEF.

Demand for green hydrogen is strongest in Europe and China where policy – and partly necessity – is opening up investment opportunities; but the US is seeking to catch up, with at least $20 billion in supply-side incentives on offer from the federal government, said BNEF’s lead hydrogen analyst Adithya Bhashyam.

The biggest offering comes from new hydrogen production tax credits that can provide up to $3 per kilogramme of gas produced. That makes low-carbon hydrogen immediately competitive with its fossil counterpart in many parts of the US.

By the end of the decade, the credits could make low-carbon hydrogen from the US the cheapest in the world — well below the $1 per kilogramme benchmark goal set by the US Department of Energy, the statement noted.

Bashyam cited delays in adding clean power and the pace of growth in the rest of the hydrogen supply chain as risk factors but doesn’t see electrolyser manufacturing capacity becoming a constraint to hydrogen deployment this decade if companies implement near-term plans.

(Writing by Sowmya Sundar; Editing by Anoop Menon)

(anoop.menon@lseg.com)