Global Water Electrolysis Market 2021
- Market Report
- ID: CCE932GB
- Delivery Time: 1 Business Day
- Tag: Water Electrolysis
Market Overview
The global smart crop monitoring market, valued at $360 million in 2021, is projected to grow at a CAGR of 35.4% and reach $7,179 million by 2031.
An electrolyzer is a system that utilizes electricity to split water into hydrogen and oxygen through electrolysis. The main purpose of this process is hydrogen production, which can be stored as compressed or liquefied gas. The oxygen produced during electrolysis is either released into the atmosphere or utilized for other applications. With the increasing demand for sustainable and low-carbon emission energy sources, companies and governments are looking for ways to meet the projected 25% to 30% growth in energy demand by 2040. Hydrogen, often referred to as the fuel of the future, has the potential to prevent the annual release of 830 million tons of CO2 into the atmosphere through water electrolysis, according to the International Energy Agency (IEA). Additionally, the rising demand for hydrogen fuel cell vehicles, green ammonia, green methanol, and other applications is driving the growth of the water electrolysis market.
| Product Type | Market Report |
|---|---|
| No. of Pages | 261 |
| Release Date | June 2022 |
| Base Year | 2021 |
| Forecast Period | 2022-2031 |
| Market Size | USD 7179 Mn incremental growth between 2021 and 2026 |
| Market Segments | End-Use Application, Electrolyzer Type, Region |
| Region | Global |
| No. of Companies Mentioned | 25 |
Water electrolysis technology has a long history, dating back more than 200 years. In 1789, Dutch merchants Jan Rudolph Deiman and Adriaan Paets van Troostwijk demonstrated electrostatic discharge by using an electrostatic generator and gold electrodes. Johann Wilhelm Ritter then separated hydrogen and oxygen gases using Alessandro Volta’s battery technology in 1800. Industrial water electrolysis methods were introduced in 1888 by Russian engineer Dmitry Lachinov, and by 1902, over 400 industrial water electrolysis plants were operational. New types of alkaline electrolyzers were developed in the 1920s and 1930s, followed by General Electric’s proton exchange membrane (PEM) electrolyzers in the 1970s. However, due to the high cost of materials and limited lifespan, PEM electrolyzers were only used in specific applications and laboratory settings. Factors such as high investment and maintenance costs, as well as limited availability of renewable energy sources, hindered the widespread adoption of water electrolysis technology.
The water electrolysis market’s growth is closely linked to the hydrogen and ammonia markets. Water electrolysis is a clean and sustainable method for hydrogen production, emitting no pollutants and utilizing water as the feedstock. The increasing demand for green hydrogen and green ammonia is a significant driver for the water electrolysis market’s expansion.
The COVID-19 pandemic has caused manufacturing delays and supply chain disruptions, impacting the water electrolysis market’s growth. Companies are currently seeking long-term supply contracts with alternative suppliers to maintain uninterrupted operations and supplies of water electrolysis systems.
Market Segmentation
The market is segmented based on various factors, including end-use application, electrolyzer type, and region.
Segmentation by End-Use Application
Transportation/Mobility Industry
Refining Industry
Power and Energy Storage
Ammonia Production
Methanol Production
Other End-Use Applications
Segmentation by Electrolyzer Type
Alkaline Electrolyzer
Proton Exchange Membrane (PEM) Electrolyzer
Solid Oxide Electrolyzer Cell (SOEC)
Anion Exchange Membrane (AEM) Electrolyzers
Segmentation by Region
North America – U.S., Canada, and Mexico
Europe – Germany, France, Netherlands, Spain, and Rest-of-Europe
China
U.K.
Asia-Pacific and Japan – Japan, India, South Korea, Australia, and Rest-of-Asia-Pacific and Japan
Rest-of-the-World – South America, Middle East and Africa
The refining segment is projected to be the dominant market application during the forecast period of 2022-2031. As per the International Energy Agency (IEA), the refining industry consumed 40 million tons of hydrogen in 2020, out of the total global demand of 90 million tons. Hydrogen plays a crucial role in various processes within the refining industry, including hydrodesulfurization, hydrocracking, isomerization, polymerization, and more. The increasing demand for diesel fuels has also contributed to the growing need for hydrogen in this industry. Currently, the refining industry relies heavily on hydrogen obtained from fossil fuels. The demand for hydrogen has risen in refineries for several applications, such as sulfur removal through hydrodesulfurization, conversion of long-chain hydrocarbons into shorter chains via hydrocracking, hydrogenation of aromatics to cyclo-paraffin or alkanes through de-aromatization, and conversion of normal paraffin into iso-paraffin via hydro-isomerization to enhance product properties. Additionally, stricter regulations on sulfur content in diesel fuel have further increased the demand for hydrogen in refineries. Although water electrolysis was initially used to produce hydrogen, the majority now comes from natural gas reforming (48%), as a by-product of chlorine production in the Chlor-alkali industry (30%), and as a by-product of olefin production in petrochemical plants.
The alkaline electrolyzer segment is expected to dominate the market among different types of electrolyzers during the forecast period of 2022-2031. Alkaline electrolyzers were the first commercially available electrolyzers for industrial applications and remained the only option until the 1970s when proton exchange membrane (PEM) technology emerged. Alkaline electrolyzers are cost-effective and have a longer lifespan compared to PEM electrolyzers, which use precious metals like platinum group metals (PGMs). Alkaline electrolyzer technology is well-established and widely used worldwide, particularly for green hydrogen production up to the megawatt scale. A typical alkaline electrolyzer unit consists of two electrodes, an anode and a cathode, immersed in a concentrated aqueous alkaline electrolyte solution containing 20 to 30 mass% of potassium hydroxide (KOH). The commonly used electrode materials are low-cost steel or nickel alloy-plated steel due to their efficiency and commercial availability. The electrodes are arranged with minimal spacing through a thin diaphragm that allows the separation of hydrogen and oxygen gases.
Europe holds dominance in the water electrolysis market primarily due to the presence of leading companies such as Nel ASA, thyssenkrupp AG, ITM Power PLC, among others. The region benefits from a highly developed renewable energy market and a growing sales volume of fuel cell vehicles. European countries were early adopters of water electrolysis technology for hydrogen production, and in 2020, Europe accounted for approximately 40% of global water electrolyzer installed capacity, according to the IEA. Moreover, the European Union has incorporated electrolyzer capacity as part of its hydrogen strategy, aiming to achieve an installed capacity of 75 gigawatts (GW) by 2030. Europe is actively investing in lower-cost methods to produce hydrogen through water electrolysis to reduce carbon emissions. The region has formulated a comprehensive hydrogen strategy encompassing production and application aspects, and has allocated funds towards green hydrogen production. Furthermore, the expansion of hydrogen usage in industries like transportation, steel, and iron manufacturing, where green hydrogen is utilized as a fuel, is a key focus of Europe’s hydrogen strategy. Financial institutions and the European Investment Bank (EIB) have also provided significant funding for large-scale green hydrogen projects in the region.
Competitive Landscape
The selection of the profiled companies was based on inputs gathered from primary experts, as well as an analysis of their company coverage, product portfolio, and market penetration.
Key companies profiled in this report include Asahi Kasei Corporation, Nel ASA, thyssenkrupp AG, Cummins Inc., Toshiba Energy Systems & Solutions Corporation, Teledyne Energy Systems Inc., Suzhou Green Hydrogen Energy Co., Ltd., Suzhou Jingli Hydrogen Production Equipment Co., Ltd., ITM Power PLC, Clean Power Hydrogen Group Limited, Plug Power Inc., Hitachi Zosen Corporation, John Cockerill, Siemens Energy AG, McPhy Energy S.A., Enapter AG, Elogen, h2e Power Systems Pvt. Ltd., Ohmium, Hystar, Verdagy, OxEon Energy, LLC, EvolOH, Inc., Evolve Hydrogen Inc., ERGOSUP.
Recent Industry Developments
In June 2022, Bosch made an announcement regarding its planned investment of $1.3 billion by 2025 in the field of hydrogen. Having already made significant investments in fuel cell technology, the company now intends to utilize its expertise in this area to develop electrolyzers. They are planning to allocate $600 million towards this endeavor by the year 2030.
Also in June 2022, De Nora Water Technologies and Saline Water Conversion Corporation (SWCC) expanded their partnership. They signed a memorandum of understanding (MOU) for collaborative research on brine mining and water electrolysis.
Hyundai Engineering & Construction (Hyundai E&C) announced in June 2022 that they have been selected by the Ministry of Trade, Industry, and Energy to undertake a project involving the construction of a water electrolysis-based hydrogen production base. Hyundai E&C will be responsible for developing the infrastructure necessary for the production, storage, and transportation of over one ton of hydrogen per day.
In May 2022, Frontier Energy Ltd. revealed that they have chosen alkaline water electrolysis (AWE) as the preferred technology for green hydrogen production at the Bristol Springs Solar (BSS) Project in Western Australia. The selection of AWE was based on its cost-effectiveness and technological reliability compared to other water electrolysis technologies.
ThyssenKrupp nucera announced in April 2022 that Air Products has selected their alkaline water electrolysis technology for the production of green liquid hydrogen. This technology will be used at a facility located in Casa Grande, Arizona, with a daily production capacity of 10 metric tons.
Key Questions Answered
What are the primary factors and trends influencing the water electrolysis market?
How has the global water electrolysis market been affected by the COVID-19 pandemic?
What measures have existing players taken to enhance their market position, and what strategies are new entrants adopting in the market?
Which types of electrolyzers and end-use applications lead the market, and how are they expected to perform during the forecast period?
What are the recent developments in countries worldwide regarding the growth of the water electrolysis market, and what patterns can be observed in terms of water electrolyzer installations?
What are the key challenges associated with the adoption of water electrolysis in different regions and countries?
Are there any government regulations, either at a regional or global level, that impact the water electrolysis market?
