Signs of Life in the Green Hydrogen Sector

Commercial activity in the green hydrogen sector has fallen well below expectations in recent months. Higher interest rates, material and labor inflation, technical hurdles and a challenging regulatory landscape have all contributed to a dramatic slowdown in projects reaching “final investment decision” and a dearth of big electrolyzer orders.  Nevertheless, with some of those headwinds ameliorating and a rising tide of demand side stimulus hitting the market, a number of projects have taken key steps forward in early 2024, perhaps signaling a recovery is on the horizon. Examples include:

Jan 10: H2 Energy Europe received a key environmental approval to proceed with construction of its large scale (1GW) green hydrogen plant in Esbjerg, Denmark.

Jan 17: Fortescue announced it has contracted Tecnimont to prepare a Front End Engineering Design (FEED) for its planned 300MW green ammonia project in Norway. The project has already been awarded €200mn in subsidies from the EU.

Jan 19: Nel signed a contract for 10MW of alkaline electrolyzer equipment to be deployed in Korea by Samsung C&T.

Jan 22: H2 Green Steel raised €4.2bn of additional debt financing to construct a large plant in Sweden that will use green hydrogen for the direct reduction of iron ore.

Jan 30:  Edify Energy announced it had secured AUD48.2 million in funding to proceed with the first stage (17.6MW) of its Port of Townsville green hydrogen plant in Queensland.

Feb 2: Plug Power announced it has signed a contract to provide a Basic Engineering and Design Package (part of a FEED that pertains specifically to electrolyzer systems) for an undisclosed 500MW green hydrogen project in Europe.

Feb 2: HydrogenPro announced it has signed a contract to provide a FEED for an undisclosed 300MW green ammonia plant int Texas.

Feb 13: ITM Power announced it has signed a contract to provide a FEED for an undisclosed multi-hundred MW green hydrogen plant in Europe.

The activity above is consistent with commentary from senior management of major electrolyzer manufacturers who maintain that, notwithstanding the slow down in orders, pipelines remain active with more and larger projects working their way towards realization.