The latest report by the International Energy Agency (IEA) forecasts a 45GW increase in hydrogen-dedicated renewable energy capacity from 2022 to 2028, a 35% decrease from previous estimates. According to the IEA, this growth represents only 7% of planned projects and a tenth of governments’ announced 2030 targets.
China, Saudi Arabia, and the United States account for 75% of the projected growth, with China leading the way. The IEA emphasizes that political momentum for low-emission hydrogen has increased due to climate goals, energy insecurity, and new industrial strategies.
However, this momentum hasn’t translated into deployment, the agency states. It attributes the slow progress to barriers such as uncertainties about demand, regulatory frameworks, and infrastructure.
The downward revision in growth is primarily due to delays in project development and uncertainties surrounding demand and offtake. The IEA highlights the challenges of bridging the cost gap between renewable and fossil fuels-based hydrogen.
Transporting and storing hydrogen poses significant challenges due to the high costs and low temperatures required for liquefaction. Inflation across the value chain increases capital costs, affecting project bankability.
China plays a pivotal role in global renewable hydrogen growth, driving annual increases in production. With over half of the world’s electrolysis capacity, China aims to expand its electrolyzer capacity to 100 GW by 2030, focusing on technological advancements and infrastructure development.
China faces challenges in supporting demand and off-takers but is enhancing hydrogen storage technologies and promoting local utilization. Projects aim to convert hydrogen into ammonia and methanol for transportation and exports.
International collaborations, such as agreements between Chinese and Saudi companies, illustrate China’s commitment to clean hydrogen technology and sustainable energy solutions.
Find the International Energy Agency Report here
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