Industrial Hydrogen, Neither Intermittent & Cheap Nor High-Cost High Capacity Power Works

Key Points

In our recent work, we have focused on power, which appears to be a significant constraint to industrial decarbonizing investments – a lack of availability will scale back hydrogen investments (although not the noise).
The choice appears to be between intermittency at very low operating rates (projects advocated at 20% capacity factor) or power that is too expensive to make even the best subsidies worthwhile.
The more obvious conclusion is that projects will stall as no one is willing to pay up to cover the high costs – equipment providers who have invested early and who are cash flow negative have a high failure risk.
None of this applies to China or international projects supported by China and using cheap Chinese equipment – this will give China significant economies of manufacturing scale well ahead of any companies in the West.
We look at power more broadly, from our most recent Sustainability report, and we also look at some ammonia initiatives, more blue than green. For all the reasons discussed above – new project announcements are slow.

Exhibit 1: Who do you trust to be there for you with equipment in 2026/27?