Hydrogen Economy

Plugging Some Holes: Is There A Way Out Of The Slump
November 21, 2023
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C-MACC Hydrogen Weekly Update 21

Plugging Some Holes: Is There A Way Out Of The Slump

  • Weekly Theme: Hydrogen’s Complex Path
  • News Update
  • Projects Update
  • Ammonia/Methanol Update
  • Power Update
  • Next Week: Regional Economics Review

Key Points

  • Willingness to pay looks like the major stumbling block when it comes to hydrogen development as production incentives are driving investment in production equipment for which there is no demand.
  • Demand incentives may be the answer, but this is more taxpayer money – demand mandates may be the better solution and may provide the most economic pathways, but agreement is a challenge.
  • Small hydrogen projects, while not capital efficient, may be all that market demand needs today, but this leaves the equipment industry with a growing capacity overhang and no path to scale economies.
  • Otherwise, we question the headlong rush into hydrogen infrastructure in Europe, with many of the billions spent on pipelines likely to be wasted as distributed power and hydrogen evolves.

Exhibit 1: While there may be some outliers, we see most sustainability/transition pathways facing customers with this type of tolerance for higher prices.

Source: Capital IQ and C-MACC Analysis

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