Short rant: that’s one way to perpetuate the status quo. Hydrogen has some critical uses, but the extent of its penetration in consumer markets is a function of our attitude to waste and centralisation.
Circularity is gaining momentum as a key theme. Another key point is that energy companies are basically profit machines for the few. Take residential heat for example. Most profits from repurposing the gas grid will go to current owners.
Now imagine we built new, passive houses or energy co-ops instead. How many new jobs would that create? How much less energy would we need in the long run? How empowering and equitable would it be for communities?
Power to the people, by the people, for the people.
Sadly, a vision that is unlikely to happen given current power structures and distribution of wealth.
Or is it? In a few years economies of scale for hydrogen will matter less than access to good renewable resources.
/end
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A real masterclass in competition among electrolyser manufacturers from BNEF's Head of Hydrogen Martin Tengler during a recent Hydrogen Europe webinar.
Here's what you need to know to be up to speed.
1) Electrolyser demand is not keeping up with planned mfg capacity.
2) Chinese electrolyser systems are 3-6 times cheaper than Western competitors. Key factors:
🧑🏭 Cheaper labour
🏭 World's most developed supply chains
🔩 Lower quality materials
🥵 Overestimating product specs (remember this one it's important!)
3) Electrolyser systems (stack + balance of plant) accounts less than half of final project capex in China, and less than a third in US/EU.
🚢Electrolyser systems are the most likely candidates for CN exports.
Pursuing lax rules for accessing hydrogen production tax credits under the IRA might result in more electrolyser sales domestically.
However this would come at a cost of ceding U.S. potential to become the world's green chemical exporting superpower to CN. Thread 1/10
You see, US has loads of land and good renewable resopurces, but China has some of the world's best renewable resources to produce electrolytic hydrogen. 2/10
Will green hydrogen cost declines follow a solar-like pathway? Or are they more like batteries? Perhaps something else entirely?
In an excellent report Ramboll - an EPC firm - makes the case that electrolyser plants could be a mix of all 3.
Here's what that means for H2 capex:
Most of the public forecasts of electrolyser plant costs use learning curves to determine future costs. This has worked well for predicting solar and battery prices in the past, and learning curves can. be constructed for electrolyser stacks too. However...
A green hydrogen plant will be much more than the stack. Ramboll divides it into 3 work packages
1) The electrolyser stack 2) The electrolyser system which integrates stack with electrical and gas balancing equipment 3) The H2 plant, which integrates the electrolyser system
Most discussions of electrolysis revolve around the competition between alkaline and PEM technologies.
But what about solid oxide (aka SOEC)?
Proud to announce the release of my technology deep dive in collaboration with @cleanaircatf ! A couple of key findings:
Solid oxide electrolysers are also known as 'high-temperature' electrolysers because they operate at >500C, and take steam, rather than an aqueous solution, as an input.
With access to an external source of process heat to generate steam, such as from ammonia, chemicals, and steel plants, SOECs gain a potential 20% electrical efficiency advantage over competing architectures.
Ever wondered what is the true cost of an electrolyser system?
Electric Hydrogen - the most funded startup to emerge in the last two years - just released a super interesting white paper. They claim to be twice as cheap as incumbents.
How will they do it? 🧵
While other manufacturers might provide just the stack (1/2 the cost of a system), EH2’s offer includes the stack, the balance of plant, and commissioning services. This close integration likely allows EH2 to pass on the margin of EPC contractors as cost declines to the customer.
Another important feature is the smart design of the system. Systems engineered for large stack sizes of 100 MW reduce the required balance of plant. Additionally, EH2’s stack has an output pressure of up to 30 bar, which reduces the need for external compression.
Slow than expected demand ramp up, and massive overcapacity - that's the state of today's electrolyser industry.
BloombergNEF expects just 5 GWs of shipments next year against 30+ GW of manufacturing capacity. And yet, lead times for bankable electrolysers are 2+ years!
Short🧵
Some electrolyser manufacturers like ITM have already pared back their gigafactory ambitions. I suspect many others will be running their factories at low utilisation.