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Hydrogen Electrolyzers Procurement Market Size
Based on the industry analysis covered by the ELINT Market Research in the hydrogen electrolyzers procurement market research report, the global market of hydrogen electrolyzers will grow exponentially during 2024-2030 with a higher compound annual growth rate. Supplies of hydrogen gas worldwide have kept pace with demand over the last few years, and they are likely to grow further at a CAGR of 4% from 2023 to 2026. Refineries and ammonia plant installations are chief hydrogen consumers, contributing to more than 65% of consumption. Hydrogen demand has risen dramatically from 2017 to 2021, growing by 20% due to environmental regulation.
The hydrogen electrolyzers market is quite balanced, with pre-booked contracts and allocated capacities by primary producers. Therefore, by 2023, there is not expected to be a severe shortage. However, a sudden swing in petrol prices could be a risk to this balance due to the potential disruption of supply contracts and the triggering of price update clauses. Hydrogen production by source is apportioned as follows: Natural Gas 47%, Coal 27%, Oil 22%, Electrolysis 4%. In the United States, this is skewed heavily towards Natural Gas 95%, with Coal 2%, Electrolysis 2%, and Oil 1% making up the remainder.
Market Definition
The hydrogen electrolyzer market would involve manufacturing and selling devices that split water into hydrogen and oxygen using electricity. This process has been called electrolysis, and together with others, it will form the backbone in the production of green hydrogen, supposedly a clean and sustainable energy source. A robust integration of hydrogen electrolyzers in transport, industry, and energy storage is in process because they can decrease carbon emissions and generate renewable energy sources.
Hydrogen Electrolyzers Procurement Market Drivers
- Adoption of Clean Energy Solutions
One of the main drivers is the global drive toward decarbonization and clean energy solutions to address climate change. Hydrogen technologies have become essential for countries and industries worldwide to invest in different varieties.
- Technological Advances
Innovative developments in electrolyzers, which have made the process more efficient and much cheaper, further impelled the growing market.
Hydrogen Electrolyzers Procurement Market Challenges
- Higher Production Cost
Of course, production costs are still a barrier because the technology and materials used in electrolyzers can cost hundreds of thousands.
- Underdeveloped Infrastructure
Next, infrastructures for hydrogen distribution and storage have yet to be developed, which creates a logistical problem.
Hydrogen Electrolyzers Procurement Market Opportunities
- Reducing Greenhouse Gas Emissions
As nations emphasize reducing greenhouse gas emissions, there may be a fast-growing demand for green hydrogen derivable from renewable sources of energy.
- Increasing Collaborations
Government-private sector partnerships would accelerate hydrogen infrastructure development, applying it as a broader and more feasible energy source.
Hydrogen Electrolyzers Procurement Market Segmentation
The hydrogen electrolyzers market can be segmented based on technology, application, and end-use industry.
- The hydrogen electrolyzers procurement market research report segments the market based on technology into alkaline, proton exchange membrane (PEM), and solid oxide electrolyzers.
- As per application, the hydrogen electrolyzers procurement market research report classifies the market into industrial processes, transportation, and power generation.
- The hydrogen electrolyzers procurement market research report divides the market by end-use industry into chemicals, steel production, oil refining, and renewable energy.
Regional Outlook of the Hydrogen Electrolyzers Procurement Market
In the United States, most hydrogen production is driven by oil refining, particularly on the Gulf Coast, where many refineries exist. On-site/pipeline and merchant hydrogen production plants in North America have significant players such as Air Products, Linde Plc, and Air Liquide, commanding over 100 plants. Matheson recently joined as the fourth considerable player. These companies hold quite a large share of the hydrogen electrolyzers market in Europe. Fundamentally, on a global scale, most hydrogen consumption is concentrated only in the oil refinery and ammonia production sectors, proving regional and industrial dependencies in the hydrogen electrolyzers market.
Cost Component in the Hydrogen Electrolyzers Procurement Market
The cost structure of hydrogen electrolyzers includes capital expenditures for investments in the electrolyzer units, operational expenditures covering maintenance and electricity costs, and expenses related to infrastructure for hydrogen production storage and distribution. Electricity costs will, therefore, become imperative because they have a direct impact on the economics of hydrogen production.
Engagement Strategies in the Hydrogen Electrolyzers Procurement Market
The hydrogen electrolyzers market’s engagement models are collaborations among stakeholders across the value chain conducted by technology providers, energy companies, and governments. Strategic partnerships and joint ventures can underpin technology development by sharing risks and drawing on combined expertise. Public-private partnerships and awareness initiatives demonstrating the viability of hydrogen technologies may also further raise the pace of this market adoption process.
Contract Period in the Hydrogen Electrolyzers Procurement Market
Such electrolyzer contracts can last several years because this business usually involves long-term investments. Contracts thus provide for supplying, installing, and servicing such electrolyzer systems besides stipulating electricity supply and hydrogen offtake conditions. The duration of the contracts will differ depending on the magnitude of the projects, funding structures in place, and end-user requirements. Long-term agreements will help stabilize both the supplier and the customer, ensuring the hydrogen production facilities’ continuous running and optimization.
Negotiation Factors in the Hydrogen Electrolyzers Procurement Market
Several critical factors are associated with the negotiation in the hydrogen electrolyzers market. One such factor is price, which depends upon various aspects like the cost of electrolyzer units, installation, and electricity. Another critical factor is performance guarantees and warranties associated with equipment reliability and efficiency. The terms and availability associated with maintenance and support services also act as a factor influencing the negotiations.
Leading Players in the Hydrogen Electrolyzers Procurement Market
The significant players in the hydrogen electrolyzers market have continued technology development with market expansion. Companies such as Nel, Plug Power, PERIC, Ohmium, Bloom Energy, and Enapter are among the most prominent ones using innovations to move electrolyzer technologies forward. These companies have been involved in several successful projects presently running across the globe with industry partners and respective governments for popularizing H2-based solutions.
Hydrogen Electrolyzers Procurement Market Size
Based on the industry analysis covered by the ELINT Market Research in the hydrogen electrolyzers procurement market research report, the global market of hydrogen electrolyzers will grow exponentially during 2024-2030 with a higher compound annual growth rate. Supplies of hydrogen gas worldwide have kept pace with demand over the last few years, and they are likely to grow further at a CAGR of 4% from 2023 to 2026. Refineries and ammonia plant installations are chief hydrogen consumers, contributing to more than 65% of consumption. Hydrogen demand has risen dramatically from 2017 to 2021, growing by 20% due to environmental regulation.
The hydrogen electrolyzers market is quite balanced, with pre-booked contracts and allocated capacities by primary producers. Therefore, by 2023, there is not expected to be a severe shortage. However, a sudden swing in petrol prices could be a risk to this balance due to the potential disruption of supply contracts and the triggering of price update clauses. Hydrogen production by source is apportioned as follows: Natural Gas 47%, Coal 27%, Oil 22%, Electrolysis 4%. In the United States, this is skewed heavily towards Natural Gas 95%, with Coal 2%, Electrolysis 2%, and Oil 1% making up the remainder.
Market Definition
The hydrogen electrolyzer market would involve manufacturing and selling devices that split water into hydrogen and oxygen using electricity. This process has been called electrolysis, and together with others, it will form the backbone in the production of green hydrogen, supposedly a clean and sustainable energy source. A robust integration of hydrogen electrolyzers in transport, industry, and energy storage is in process because they can decrease carbon emissions and generate renewable energy sources.
Hydrogen Electrolyzers Procurement Market Drivers
- Adoption of Clean Energy Solutions
One of the main drivers is the global drive toward decarbonization and clean energy solutions to address climate change. Hydrogen technologies have become essential for countries and industries worldwide to invest in different varieties.
- Technological Advances
Innovative developments in electrolyzers, which have made the process more efficient and much cheaper, further impelled the growing market.
Hydrogen Electrolyzers Procurement Market Challenges
- Higher Production Cost
Of course, production costs are still a barrier because the technology and materials used in electrolyzers can cost hundreds of thousands.
- Underdeveloped Infrastructure
Next, infrastructures for hydrogen distribution and storage have yet to be developed, which creates a logistical problem.
Hydrogen Electrolyzers Procurement Market Opportunities
- Reducing Greenhouse Gas Emissions
As nations emphasize reducing greenhouse gas emissions, there may be a fast-growing demand for green hydrogen derivable from renewable sources of energy.
- Increasing Collaborations
Government-private sector partnerships would accelerate hydrogen infrastructure development, applying it as a broader and more feasible energy source.
Hydrogen Electrolyzers Procurement Market Segmentation
The hydrogen electrolyzers market can be segmented based on technology, application, and end-use industry.
- The hydrogen electrolyzers procurement market research report segments the market based on technology into alkaline, proton exchange membrane (PEM), and solid oxide electrolyzers.
- As per application, the hydrogen electrolyzers procurement market research report classifies the market into industrial processes, transportation, and power generation.
- The hydrogen electrolyzers procurement market research report divides the market by end-use industry into chemicals, steel production, oil refining, and renewable energy.
Regional Outlook of the Hydrogen Electrolyzers Procurement Market
In the United States, most hydrogen production is driven by oil refining, particularly on the Gulf Coast, where many refineries exist. On-site/pipeline and merchant hydrogen production plants in North America have significant players such as Air Products, Linde Plc, and Air Liquide, commanding over 100 plants. Matheson recently joined as the fourth considerable player. These companies hold quite a large share of the hydrogen electrolyzers market in Europe. Fundamentally, on a global scale, most hydrogen consumption is concentrated only in the oil refinery and ammonia production sectors, proving regional and industrial dependencies in the hydrogen electrolyzers market.
Cost Component in the Hydrogen Electrolyzers Procurement Market
The cost structure of hydrogen electrolyzers includes capital expenditures for investments in the electrolyzer units, operational expenditures covering maintenance and electricity costs, and expenses related to infrastructure for hydrogen production storage and distribution. Electricity costs will, therefore, become imperative because they have a direct impact on the economics of hydrogen production.
Engagement Strategies in the Hydrogen Electrolyzers Procurement Market
The hydrogen electrolyzers market’s engagement models are collaborations among stakeholders across the value chain conducted by technology providers, energy companies, and governments. Strategic partnerships and joint ventures can underpin technology development by sharing risks and drawing on combined expertise. Public-private partnerships and awareness initiatives demonstrating the viability of hydrogen technologies may also further raise the pace of this market adoption process.
Contract Period in the Hydrogen Electrolyzers Procurement Market
Such electrolyzer contracts can last several years because this business usually involves long-term investments. Contracts thus provide for supplying, installing, and servicing such electrolyzer systems besides stipulating electricity supply and hydrogen offtake conditions. The duration of the contracts will differ depending on the magnitude of the projects, funding structures in place, and end-user requirements. Long-term agreements will help stabilize both the supplier and the customer, ensuring the hydrogen production facilities’ continuous running and optimization.
Negotiation Factors in the Hydrogen Electrolyzers Procurement Market
Several critical factors are associated with the negotiation in the hydrogen electrolyzers market. One such factor is price, which depends upon various aspects like the cost of electrolyzer units, installation, and electricity. Another critical factor is performance guarantees and warranties associated with equipment reliability and efficiency. The terms and availability associated with maintenance and support services also act as a factor influencing the negotiations.
Leading Players in the Hydrogen Electrolyzers Procurement Market
The significant players in the hydrogen electrolyzers market have continued technology development with market expansion. Companies such as Nel, Plug Power, PERIC, Ohmium, Bloom Energy, and Enapter are among the most prominent ones using innovations to move electrolyzer technologies forward. These companies have been involved in several successful projects presently running across the globe with industry partners and respective governments for popularizing H2-based solutions.
