BAKU, Azerbaijan, January 16. Between 2023 and 2028, the projected growth in renewable power capacity allocated for hydrogen and hydrogen-based fuel production is anticipated to reach 45 GW, Trend reports.
According to the International Energy Agency (IEA), the primary contributors to this growth are China, leading the way, followed by Saudi Arabia and the US.
Collectively, these three markets are expected to constitute over 75 percent of the renewable capacity dedicated to hydrogen production by the year 2028, the agency noted.
Initially, the global annual growth is spearheaded by China, contributing to over 70 percent of net additions between 2023 and 2024. In the early stages, state-owned enterprises in China are taking the lead in deploying electrolyzers, working on projects to meet hydrogen production targets at both the provincial and national levels. This effort is estimated to spur a growth of 2 GW in renewable electricity capacity in 2023, followed by 4 GW in 2024.
As we progress towards 2028, the annual growth rate is set to accelerate to over 6 GW. However, this acceleration is somewhat constrained by the uncertainty surrounding hydrogen demand, the IEA pointed out. Despite this unpredictability, China is anticipated to maintain its position as the largest single market throughout the forecast period. Nonetheless, by 2028, its share relative to the rest of the world is expected to decrease as projects from other markets start to be commissioned.
By 2025, operational projects in potential export countries, notably Saudi Arabia's Neom project, come into play. Additionally, new EU capacity could emerge by 2026, with Spain, Denmark, and Germany taking the lead. Looking ahead to 2028, half of the global annual growth in hydrogen-driven renewable capacity is projected to originate from outside of China.
At the same time, the agency noted that this renewed forecast indicates a much lower pace of the amount of renewable energy capacity growth dedicated to hydrogen production. The forecast for this year sees a 35 percent reduction compared to 2022, primarily attributed to downward revisions in all regions except China.
The main contributing factor is the sluggish progress in finalizing planned projects, resulting from a shortage of off-takers and the inflation-induced increase in production costs, the IEA noted. In summary, the growth in renewable energy capacity for hydrogen production accounts for merely about 7 percent of the initially announced project capacity.