Hydrogen development, given its application across various industries, is indispensable to attaining energy transition, meeting decarbonisation goals, and positioning leading companies as market experts
Against this backdrop, hydrogen production capacity is estimated to reach 4.5 mn tons per annum (mtpa) worldwide by the end of the year, representing 165% growth compared to 2022, says GlobalData, a data and analytics company.
GlobalData’s recent publication 'Hydrogen Transition Outlook and Trends: Q1 2023' highlights deals trends and investments as useful benchmarks to identify those leading companies driving the hydrogen market growth.
Andres Angulo, energy analyst at GlobalData, said, “During 2022, over 393 deals related to hydrogen were closed, representing a significant increase compared to 277 deals registered in 2021. This shows an upward trend in the hydrogen market development, which could be decisive in achieving over 71 mtpa capacity worldwide by 2030. However, the partnerships represented 66% of the deals last year, and the number of deals decreased after Q2 2022 to numbers even below those seen in the same quarter in 2021. This could have been due to the companies trying to strengthen their core business and diversify the investment risk given the global economic situation.”
Despite the high number of partnerships formed between companies as compared to government agencies, investing and raising capital was of utmost importance to develop the hydrogen economy in 2022. Last year, the merger and acquisitions (M&A) deals reached US$24.4bn in monetary value, representing an increase compared to 2021 levels. On the other hand, venture finance deal values also grew from US$595.23mn to over US$3,001.1mn.
In 2022, over 111.9 mtpa hydrogen capacity was announced in the US, Denmark, Egypt, Canada, Portugal and other countries. In Canada, Green Hydrogen International (GHI) announced two important green hydrogen projects as a sole participant, with 43 mtpa capacity each, which are expected to begin production in 2030. Some other companies took part in multiple project investments globally to diversify their risk, including Fortescue Industries, which has two-thirds of its capacity outside its home country, Australia.
Companies like GHI, Suez Canal Economic Zone, New and Renewable Energy Authority, Sovereign Fund of Egypt, and Egyptian Electricity Transmission Co are the global leaders in low carbon hydrogen capacity, with 56.3 mtpa active capacity combined. As part of developing low-carbon hydrogen, and with electrolysis being a key technology to produce green, electrolysis capacity of over 1,065 GW is now in pipeline. This is mainly being produced by manufacturing companies such as Hydrogenics, Nel ASA, ThyssenKrupp, ITM Power, HydrogenPro, Enapter and Plug Power.
During last year, as the hydrogen economy raised, companies like Globeleq Africa, Linde, John Wood Group, ThyssenKrupp, H2-Industries, Alcazar energy, and Samsung Engineering took advantage of the growing demand for hydrogen capacity and became the engineering, procurement and construction (EPC) leaders for green projects.
Angulo concludes, “Despite the challenging global economic conditions, the number of investments in low-carbon hydrogen increased from 600 to over 1,700 between Q4 2021 and Q4 2022. As of January, 93% of both active and pipeline hydrogen projects were green, as reflected by the increasing manufacturers' electrolysis capacity and the number of EPC contractors participating in bigger green projects. This, in addition to the renewable energy development, will create a momentum that will accelerate the cost reduction across the entire hydrogen value chain.”