The Bust and Boom of Electrolyzers, or Is It Just Bust and Then Bust Again?

Key Points

Exhibit 1 shows the rapid uptake needed in electrolyzer-based hydrogen to meet the demands of net zero projections for 2050. These are unattainable, but even lower targets suggest massive electrolyzer investment.
The added challenge is the lack of expected activity between now and 2030, leaving current (too many) equipment makers with too much capacity – too little cash flow and, in many cases, too much debt.
Will a near-term collapse of the industry – bankruptcies and restructuring – harm the ability to invest for the longer term, making the post-2030 projections below even less likely – perhaps in the West, but not in China.
The more delays to current green hydrogen projects, the more peril the electrolyzer industry faces in the near-to-medium term. Fixing this quickly requires subsidy increases and premium hydrogen pricing that looks elusive.
Otherwise, we do a deeper dive into blue and green ammonia plans and review three very expensive European projects that require substantial financial support and make little economic sense.

Exhibit 1: We show our ambitious 2040 model in the context of the range of 2050 projections for hydrogen demand.