Siemens Energy and Air Liquide have formed a joint venture to mass produce industrial-scale electrolyzers in Europe for hydrogen production, the companies said June 23.
Production is expected to begin in the second half of 2023 and ramp-up to an annual production capacity of 3 GW by 2025.
“This Franco-German partnership will enable the emergence of a sustainable hydrogen economy in Europe and foster a European ecosystem for electrolysis and hydrogen technology,” they said.
Siemens Energy will hold 74.9% and Air Liquide 25.1% in the venture, with a manufacturing base in Berlin producing proton exchange membrane, or PEM, electrolysis stacks.
In an early project, the partnership is to supply the 200-MW Normand’Hy project at the Port Jerome (Seine-Maritime) industrial complex, with assembly of systems in France.
Capex vs opex
EU member states are planning massive capex-based subsidies for green hydrogen projects to help ramp-up electrolyzer production with the Important Projects of Common European Interest, or IPCEI, program the most ambitious to date.
“To make green hydrogen competitive, we need serially produced, low-cost, scalable electrolyzers,” Siemens Energy CEO Christian Bruch said.
Europe’s biggest PEM electrolyzer to date — a 10 MW unit by ITM Power — started in July 2021 at Shell’s Rhineland refinery in Germany with plans to scale-up to 100 MW.
ITM Power’s order backlog stacked up to 755 MW by June 1 as electrolyzer manufacturers are facing a wave of orders poised to benefit from support linked to the EU’s renewable hydrogen targets.
The UK-based company plans to expand capacity to 2.5 GW/year by end-2023, and 5 GW/year by end-2024.
The EU’s 2021 hydrogen strategy set a 40 GW electrolyzer capacity target for 2030 with the REPowerEU proposal lifting that ambition to 10 million mt/year of renewable hydrogen production capacity.
S&P Global Commodity Insights has tracked in its Hydrogen Production Asset Database a project pipeline of 34 GW of electrolyzer capacity announcements due online by 2030 in the EU.
Calculated grid-powered hydrogen production costs in Europe have risen sharply since 2021 as gas and power prices soared. Platts assessed the cost of producing renewable hydrogen via PEM electrolysis including capex at Eur15.64/kg June 22.
Key to production cost is electricity input with prices with the assessment based on Dutch front-month power prices currently above Eur270/MWh.
Many renewable hydrogen project developers are targeting sharply lower production costs underpinned by long-term renewable power purchase agreements or dedicated renewable generation.
Source: Spglobal.com
