ELECTROLYSER MARKET SHARE

MARKET SHARE FOR HYDROGEN ELECTROLYSERS: WHERE WILL THE UK BE IN 2030?

With the UK facing a ‘now or never’ decision on how much of a share in the European market it will have, current trajectories have it facing an equivalent loss of £1.3bn by 2030 if trends continue.

This is echoed in the hydrogen electrolysis share, which fell by 4% in the last two years, according to the CBI and McKinsey research recently published.

With the UK gradually falling behind and struggling to keep pace with the global competitiveness across the electrolyser market and other hydrogen markets, the CBI has advised the UK Government to boost political commitment.

Without further policy, the UK market share for hydrogen will fall

In order to change this, the UK government must introduce new policies and legislative frameworks to enable the scale-up of projects, establish how to trade hydrogen as a commodity and enhance the hydrogen economy in the UK.

The UK has specialist knowledge and innovation capabilities

Looking at the wider net zero agenda, the UK was also found to have far less funding assigned to address climate change when compared to European nations, including France and Germany. Germany has committed over four times as much, and the CBI found France to have committed double.

The table opposite indicates how the UK’s market share has changed over the last two years across the offshore EV battery and hydrogen electrolyser market. With total losses of £4.3bn when including EV assembly by 2030, it is clear to see the potential for the UK to increase its market share.

Total prize losses are estimated at around £4bn

However, this only comes from policy led frameworks stipulating the clear pathway to net zero and the role that hydrogen will play in this. Legislative changes and commitments need to come into force, as other nations are set to increase market share rapidly over the next seven years.

THE UK SHOULD BE WELL PLACED TO CAPTURE THIS ECONOMIC OPPORTUNITY Confederation of British Industry

Outside the UK, the global value of hydrogen electrolysers has been forecasted to be over £22bn. With other European countries lining up their share of the hydrogen pie, time is of the essence to ensure the UK keeps pace.

With the CBI ensuring that the UK isn’t left behind, it is engaging with the UK membership, which equates to almost 25% of private enterprises.

Looking at addressing policy issues is at the heart of the engagement, with hopes to deliver the highest growth route to wider decarbonisation.

Things in place to boost trajectory

- Will the UK use them?

As part of the Green Growth business campaign for 2023, Mckinsey & Co will provide the research and analytical support to make the drastic changes needed and improve the trajectory of market share by 2030.

With attention being firmly focused on securing independent energy security, there is an expectation that this will rapidly change to take advantage of the European export opportunities that hydrogen brings. This could be in the region of £8bn for electrolysers and over £3bn for offshore wind services, something the UK is uniquely positioned to offer by the end of the decade.

The report picked up on this notion, explaining: “In practice, the UK should be well placed to capture a significant proportion of this economic opportunity given its specialist knowledge and innovation capabilities.”

Chances of a turnaround in attitudes towards hydrogen impacts may be limited as the IMF recently announced the UK will be the only major economy to shrink, with an estimated reduction of 0.6%.

While the IMF predicts the UK economy will contract, it forecasts economic growth for the US (1.4%), Germany (0.1%) and France (0.7%).

Elsewhere, schemes such as REPowerEU have set out plans to diversify their supplies of clean energy, with hydrogen high up on the agenda for this. In a package delivering over €300bn of funds for projects, solar, wind and hydrogen market shares are expected to increase across the EU.

America is set to become the largest exporter of hydrogen as it stands

Across the Atlantic, the widely reported Inflation Reduction Act is a globally leading package of support for energy security. With $370bn planned support over the next decade, the rest of Europe has a challenge in competing for the world’s leading export status, the UK could play a huge role in this.

Despite this, the CBI also found that the transition is already worth £71bn to the UK and has 840,000 current jobs linked to the ‘green’ sector. With the average wage in the sector just under £10,000 more than the national average, there is encouragement that more people will transition into the sector and boost productivity.