Market Overview
Electrolysis is the process of utilizing electricity to split water into hydrogen and oxygen. The different processes used for hydrogen production includes traditional alkaline electrolysis and PEM electrolysis. The systems have ability to produce onsite demand for hydrogen, pressurized hydrogen without compressors and 99.999% of pure, dry and carbon-free hydrogen. The technical and economical advantages of hydrogen electrolyzers include ability to produce pure hydrogen, ability to produce hydrogen on-site and low-cost method for producing highly efficient hydrogen. The hydrogen electrolyzer demand is increasing at a rapid pace with a surge in government initiatives and spending on development of hydrogen related technologies across Australia and Japan. For instance in 2019, Australia government have announced the investment of around US$ 55 million to fast track the hydrogen related technologies which boost the market growth.
Market Dynamics
Drivers
- Increasing demand for highly efficient and low-space utilizing energy storage systems to handle the electricity produced from solar, wind and hydropower generation units are primary factors driving the Australia and Japan hydrogen electrolyzers market.
- Growing demand of renewable energy with surge in hydrogen technology development projects government support and initiatives
Restraints
- Easy availability of alternatives such as natural gas, electric charging stations etc may hamper the growth of this market
- Huge investment require and high total cost of ownership which restrains the market growth Economically the fuel costs per kg hydrogen is high due to lack of distribution and retail infrastructure for electrolyzers, refueling stations and fuel cells
Increasing demand for highly efficient and low-space utilizing energy storage systems coupled with government funding and support are primary factors driving the Australia and Japan hydrogen electrolyzers market
Increasing demand for highly efficient and low-space utilizing energy storage systems to operate hydrogen electrolyzers from renewable energy sources such as solar and wind is a primary factor driving the Australian and Japanese hydrogen electrolyzers market during the forecast period. For instance, in 2019, Australian Government and the Australian Renewable Energy Agency (ARENA) have announced a funding of around US$ 50 million to fast track the development of renewable hydrogen projects in Australia. ARENA’s hydrogen funding is expected to play a vital role in supporting commercial-scale deployments of renewable hydrogen in Australia. Increasing launch of compact size low space required hydrogen electrolyzer have propelled the market growth. For instance in 2018, McPhy launched a compact design of “Augmented McLyzer” technology based hydrogen electrolyzer which has a unique combination of high-pressure alkaline hydrogen electrolysis. It is the integration of new generation electrodes with a high current density, which is doubled compared to standard electrodes. Further on 3rd Dec 2019, South Australia’s government has taken a step forward for building cleaner energy with innovative hydrogen generation projects. Hydrogen Park SA (HyP SA) project costs around US$ 11.4 million, funded by Australian Gas Networks, supported by a US$ 4.9 million grant from the South Australian Government. The construction of a hydrogen production facility has started through Australian Gas Networks’ (AGN) at Hydrogen Park South Australia (HyP SA) located at the Tonsley Innovation District, south of Adelaide. HyP SA includes the 1.25 MW proton exchange membrane (PEM) electrolyzer which is being in operations by 2020. Increasing investment by the leading players for the establishment of the new renewable energy sources for electricity generation to meet the growing demand for electricity across Australia and Japan has propelled the hydrogen electrolyzer market growth.
For instance, on 30th March 2020, the Stanwell Corporation planned to install a large hydrogen electrolyzer alongside its power station at Rockhampton Australia, which has attracted funding from ARENA. The company planned to produce hydrogen at scale using a 10 MW or larger electrolyzer. Also increasing government initiatives and funding to fulfill the local demand of the electricity and electricity storage systems with post fulfillment of hydrogen storage tanks through hydrogen electrolyzers and distribute the electricity to the respective grids have propelled the need for the growth of this market. For instance, on 29th October 2020, The South Australia state government planned to launch three hydrogen hubs for positioning the region at the forefront of global clean hydrogen production and exportation. The three hubs are located at Port Bonython, Port Adelaide and Cape Hardy/Port Spencer in South Australia. Additionally, increasing establishments of renewable power generation units across the Australia and Japan coupled with growing investments by the organization in future sustainable technologies contributed the growth of the hydrogen electrolyzer market during the forecast period
Region Analysis of Japan
Japan region of hydrogen electrolyzer market is valued at US$ 2,651.32 thousand in 2019 and is estimated to grow at a CAGR of 21% over the forecast period to reach a US$ ***thousand by 2027. Japan is growing at a faster pace for the hydrogen electrolyzer market owing to rising government funding and support for the development of hydrogen technology and hydrogen production projects to support the clean and green economy.
For instance, in 2019, as per the Ministry of Trade, Economy and industry, Japanese industries and the Japanese government have allocated around US$ 748 million for the projects related to hydrogen technology to support the clean economy in the country. Further demand for the hydrogen electrolyzer in Japan is driven by a surge in the commercial project with rising funding from the government for the development of emerging and innovative technologies for hydrogen related research and pilot projects. These projects are supported by several leading organizations and companies in Japan, which includes Japan Oil, Gas and Metals, New Energy and Industrial Technology Development Organization (NEDO) and National Corporation (JOGMEC), etc. Further several private financial banks and government banks in Japan are also providing support for the development of the hydrogen electrolyzer and hydrogen-related technologies in the country. For instance, in July 2019, NEXI launched 'Loan Insurance for Green Innovation, which is applied for the projects related to hydrogen-related technologies and provides an increased commercial risk coverage rate by up to 97.5%. It may create massive demand for the growth of the hydrogen electrolyzer market in this country.
Further increasing installation of the hydrogen electrolyzer plants in Japan due to lack of presence of fossil fuels and growing demand for cleaners and green energy has created a massive demand for the hydrogen electrolyzer market in this country. For instance, on 20th April 2020, one of the largest ‘single-stack’ green hydrogen electrolyzer with a 10MW project has started in Fukushima, Japan. Further increasing installation of the hydrogen electrolyzer plants in Japan due to lack of fossil fuels and growing demand for clean and green energy has created a massive demand for the growth of the hydrogen electrolyzer market in this country. For instance, on 20th April 2020, one of the largest ‘single-stack’ green hydrogen electrolyzer with a 10MW project has started in Fukushima, Japan. Further on 17th April 2017, Hitachi Zosen Corporation provided a Hydro Spring hydrogen generation system which utilizes a solid polymer electrolyzer with a capacity of around 24 Nm3 /h for Toyota Motor Kyushu’s Miyata Plant in Japan. This project has lifted the hydrogen generation capacity to support fuel cell-powered forklifts using hydrogen in the industry. It created a massive demand for the hydrogen electrolyzer market in Japan. Also, increasing demand for hydrogen with the growing adoption of fuel cell vehicles by the Japanese has impelled the demand for the hydrogen electrolyzers market. For instance, as of 5th March 2018, Japan has around 101 hydrogen stations, which serves around 40,000 fuel-cell vehicles and is projected to increase 80,000 vehicles by 2030 whereas the total target to establish hydrogen stations reached about 160 stations by 2020 and about 320 stations by 2025. It created a massive demand for the hydrogen electrolyzer in the country.
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