Increase in concern toward reducing carbon emissions, decline in costs of renewable energy, and the growing market for IoT, smart cities, and energy as a service drive the growth of the global electrolyzer market
WILMINGTON, Del., Dec. 13, 2023 /PRNewswire/ -- Allied Market Research published a report, titled, "Electrolyzer Market by Product (Alkaline Electrolyzer, Proton Exchange Membrane (PEM) Electrolyzer, Solid Oxide Electrolyzer, and Anion Exchange Membrane (AEM)), Capacity (Less Than 500 kW, 500-2 MW, and Above 2 MW), and Application (Power Generation, Transportation, Industry Energy, Industry Feedstock, Building Heat & Power, and Others): Global Opportunity Analysis and Industry Forecast, 2023-2032". According to the report, the global Electrolyzer industry generated $3.0 billion in 2022 and is estimated to reach $34.4 billion by 2032, exhibiting a CAGR of 27.2% from 2023 to 2032.
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Prime determinants of growth
Global warming and carbon emissions have become increasingly concerning. Governments throughout the world have implemented a variety of rules and directives requiring a reduction in carbon emissions from a variety of businesses. Electrolysis, a technique that employs electricity to split water into hydrogen and oxygen, produces hydrogen. This procedure makes use of electrolyzers. Electricity is generated using either renewable or nonrenewable resources.
Hydrogen can also be created by combining an electrolyzer with solar or wind power to generate energy. This method encourages the synthesis of green hydrogen, which emits no carbon. Many businesses are opting for on-site electrolyzers with capacities ranging from 1 to 5 MW to reduce their carbon footprint.
Owing to the alarming rise in carbon emissions, rise in global temperatures, and surge in concerns about climate change, renewable energy sources have grown in popularity. Many businesses are shifted from using fossil fuels to more abundant natural resources such as solar, wind, natural gas, and water bodies in an effort to adopt good business practices.
However, the establishment of such businesses came with a high initial cost. On the other hand, as a result of technological advancements and strong advocacy for its benefits, various government policies in support of renewable energy have been enacted. Renewable energy has become less expensive, with the added benefit of having a lower carbon footprint. These falling costs drive the demand for electrolyzers.
Report coverage & details:
Report Coverage | Details |
Forecast Period | 2023-2032 |
Base Year | 2022 |
Market Size in 2022 | $3.0 billion |
Market Size in 2032 | $34.4 billion |
CAGR | 27.2 % |
No. of Pages in Report | 350 |
Segments covered | Product, Capacity, Application, and Region |
Drivers | • Increase in concern toward reducing carbon emissions. • Decline in costs of renewable energy |
Opportunities | • Growing market for IoT, smart cities, and energy as a service |
Restraints | • Limited technological advances • High initial costs coupled with privacy concerns and data security threat |
The solid oxide electrolyzer segment is projected to dominate the market growth during the forecast period.
Depending on the product, alkaline electrolyzer dominated the market share for electrolyzer in 2022 in terms of revenue. In 2022, it contributed nearly three-fifths of the total market revenue in 2022 while growing at a CAGR of 27.1%. The increasing focus on green hydrogen production, which involves using renewable energy sources for electrolysis, was a significant trend. Alkaline electrolyzers are well-suited for this purpose as they can efficiently utilize excess electricity generated from renewable sources.
However, solid oxide electrolyzers are projected to grow at a fastest CAGR during the projection period. The high operating temperatures of Solid Oxide Electrolyzers contribute to increased efficiency in hydrogen production. This trend aligns with the industry's focus on developing technologies that maximize efficiency in the electrolysis process.
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The above 2 MW segment is projected to dominate the growth during the forecast period.
Depending on the capacity, 500 kW to 2 MW segment dominated the market share for electrolyzer in 2022 in terms of revenue. With a CAGR of 27.3%, it accounted for nearly half of the revenue in 2022. Electrolyzers are high in demand as they can be installed on-site and facilitate sufficient electricity generation and hydrogen and this hydrogen is further used as industry energy or industry feedstock. Many companies are opting for medium electrolyzers installation at plant sites for hydrogen supply and added benefit of reduced carbon emissions.
However, the above 2 MW segment is projected to grow at a higher CAGR during the market forecast period. Electrolyzers with capacity above 2 MW are usually used in projects that require huge amounts of hydrogen. Such electrolyzers have applications in aerospace activities, fertilizers manufacturing, chemical processing, and food & beverage industries.
The transportation segment is projected to dominate the market growth during the forecast period.
Depending on the application, the power generation segment dominated the market share for electrolyzer in 2022 in terms of revenue. In 2022, it contributed nearly one-third of the total market revenue in 2022 while growing at a CAGR of 27.4%. Hydrogen is considered as an alternative to fossil fuels, as the re-use of water keeps continuing. Moreover, the use of wind and solar energy sources for electricity used in electrolysis has driven the electrolyzer market growth.
However, the transportation segment is projected to grow at a higher pace during the projection period. The transportation sector is one of the major contributors toward carbon emissions. Therefore, the industry is continuously seeking ways to reduce their carbon footprint. Electric vehicles that run on fuel cells or batteries serve as an ideal way for the industry to lower their carbon emissions. Hydrogen produced through electrolysis is stored in fuel cell that is further used to power vehicles.
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The Asia-Pacific region is projected to maintain its dominance the growth throughout the forecast period.
By region, Asia-Pacific dominated the market share for electrolyzer in 2022 in terms of revenue. In 2022, the Asia-Pacific region contributed more than two-fifths of the revenue at a CAGR of 27.5% during the forecast period. The Asia-Pacific region is witnessing a significant expansion of electrolyzer capacity, driven by increasing demand for green hydrogen. Ongoing R&D are focused on improving efficiency and reducing the costs of electrolyzers to enhance their competitiveness in the market. Collaboration between countries in the Asia-Pacific region and international partners is observed in research, development, and large-scale projects related to electrolyzers and green hydrogen.
Leading Market Players: -
- Cummins, Inc.
- Nel ASA
- Siemens AG
- Toshiba Corporation
- Air Liquide
- Plug Power Inc.
- McPhy Energy
- ITM Power
- Iberdrola S.A.
- Bloom Energy
The report provides a detailed analysis of these key players in the global electrolyzer market. These players have adopted different strategies such as new product launches, collaborations, expansion, joint ventures, agreements, and others to increase their market share and maintain dominant shares in different regions. The report is valuable in highlighting business performance, operating segments, product portfolio, and strategic moves of market players to showcase the competitive scenario.
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