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The global alkaline water electrolysis market size was USD 100.47 million in 2020. The global impact of COVID-19 has been unprecedented and staggering, with alkaline water electrolysis witnessing a negative demand shock across all regions amid the pandemic. Based on our analysis, the global market exhibited a decline of -8.6% in 2020. The market is projected to grow from USD 116.05 million in 2021 to USD 180.03 million in 2028 at a CAGR of 6.5% during the 2021-2028 period. The sudden rise in CAGR is attributable to this market’s demand and growth returning to pre-pandemic levels once the pandemic is over.
Alkaline water electrolysis is the process of converting water into oxygen and hydrogen. This process is widely used for hydrogen production, which finds its application in several industries, such as chemicals, petroleum, glass, refineries, automobile, pharmaceuticals, metals & mining, and others. The key market is anticipated to drive rapidly due to the growing demand for carbon-free sources of energy and an effective way of integrating renewables through the power to the gas facility.
COVID-19: Key Players Focus on Investment in Water Electrolysis Projects to Negate Sluggish Growth
The unexpected outbreak of COVID-19 has wreaked havoc on the global health system, affecting a wide range of industries. Several industrial projects may have been postponed as a result of the pandemic, causing substantial supply chain disruptions. Since January 2020, nearly every country in the world has seen a significant increase in the number of impacted cases. The global alkaline water electrolysis market has been slightly affected by the outbreak. However, the growing demand for renewable sources is anticipated to attract significant investments that will bode well for the market growth in the forthcoming years. For instance, in June 2020, ThyssenKrupp AG and De Nora expanded their manufacturing capacities for water electrolysis plants. This has enabled them to produce electrolysis cells with a total power consumption of one gigawatt annually.
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Increasing Demand for Green Hydrogen to Propel Market Growth
Green hydrogen is gaining importance worldwide as an energy carrier and carbon dioxide-free feedstock for the electronics & photovoltaic, and green chemical industry. This has led to high demand for water electrolysis plants that can produce green hydrogen. Alkaline type of water electrolysis is developing as a key technology for building a carbon-free and flexible, sustainable energy system.
Several countries across the globe are currently planning to enter the green hydrogen economy. For instance, on October 20, 2020, the Western Australian (WA) government gave the Environmental Protection Authority (EPA) approval to the first stage of the Asian Renewable Energy Hub (AREH), a 15 GW hybrid solar and wind plant. The project plans to eventually expand to 26 GW of solar and wind generation in a later stage, servicing industries throughout Australia and Asian markets with green hydrogen and ammonia. This factor is likely to drive the alkaline water electrolysis market growth.
Rising Government Regulations for Greenhouse Gas Emissions to Drive Market Growth
According to the World Economic Forum 2020, more than 120 countries have announced plans for net-zero emissions by 2050, including China, Japan, South Korea, South Africa, and Canada. Green hydrogen, manufactured by alkaline water electrolysis using solar and wind electricity, is essential for meeting international climate targets. In October 2018, United Nations Intergovernmental Panel on Climate Change (IPCC) declared that the world would have to reduce carbon dioxide emissions by 45% by 2030 and reach net zero by 2050. To ensure a global warming range between 1.5°C-2°C, more than 200 countries signed the Paris Agreement in 2015 that requires them to voluntarily and aggressively cut their carbon emissions. This factor is likely to drive the market during the global forecast period.
Increasing Demand in Transportation Sector to Augment Market Growth
The increasing popularity of electric vehicles in Europe is likely to increase demand for alkaline water electrolysis. In addition, countries like China, Japan, and South Korea have suggested major electric car implementation pledges in order to lessen the world's rising reliance on fossil fuels. In the next few years, this is projected to contribute to the market's growth.
Electric vehicles play a critical role in meeting the sustainable development scenario to reduce gas emissions and address climate change. Green hydrogen is clean energy carrier fuel. According to the International Energy Agency (IEA), the global electric vehicle market grows by 36% annually, reaching 245 million vehicles in 2030. This factor is likely to drive the market growth during the forecast period.
High Hydrogen Cost to Impede Market Growth
Alkaline water electrolysis is widely used to produce green hydrogen, but it faces more challenges due to its high cost. Green hydrogen produced from the plant is two to three times more expensive than grey hydrogen. According to the International Renewable Energy (IRENA) - Green Hydrogen Economy Report 2019, electric vehicles with fuel cells and hydrogen tanks cost at least 1.5 to 2 times more than their fossil fuel counterparts. However, key players such as ThyssenKrupp AG are developing prefabricated skid-mounted modules for water electrolysis plants, which helps to keep costs down. The units are easy to transport and can be combined to realize projects of megawatts or gigawatts, which will likely drive the market during the forecast period.
≥80 m3/h Electrolysis Segment Accounted for Largest Market Share
Based on the type, the market is categorized into ＜10 m3/h, ＜30 m3/h, ＜50 m3/h, ＜80 m3/h, and ≥80 m3/h.
The ≥80 m3/h segments accounted for the major share of the market in 2020. Large-scale systems frequently use these types of equipment. Because cheaper nickel-based catalysts are used, this technology has a lower initial cost and a longer shelf life.
The ＜10 m3/h, ＜30 m3/h, ＜50 m3/h electrolysis plants are mainly used for small-scale hydrogen production. High differential pressures across the membrane are used in these devices.
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Power Plants Segment to Hold Highest Position
Based on application, the market is classified into power plants, steel plants, electronics & photovoltaics, industrial gases, and others.
The power plants segment held a major share of the market in 2020. Electrolysis is mostly utilized to create oxygen and hydrogen. They are frequently employed to minimize greenhouse gas emissions and other pollutants in the power generation industry.
In the electronics and photovoltaics sector, electrolysis is used for fuel cells, as hydrogen can store large amounts of energy and release it when needed for industrial use.
Electrolysis is used in steel plants to make fossil-free steel by reducing iron ore directly.
Europe Alkaline Water Electrolysis Market Size, 2020 (USD Million)
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The market has been analyzed across five key regions, comprising North America, Asia Pacific, the Middle East & Africa, Europe, and Latin America.
Europe was estimated to hold the largest market share worth USD 36.60 million in 2020. As a hub for vehicles, petrochemicals, refining, glass purification, and fertilizers, Germany has the greatest market share in the region. Furthermore, hydrogen is frequently used in these industries, which is projected to boost the region's alkaline water electrolysis market expansion.
North America is the fastest-growing region due to the rising demand for green hydrogen from the automotive industry. Furthermore, many countries, including the United States and Canada, are enacting zero-emissions regulations in the transportation, electricity, transportation, and heating industries.
Developing economies in Asia-Pacific, such as India and South Korea, are focusing on implementing sustainable energy technologies. This is likely to help the product gain traction in the region.
Due to the growing usage of green hydrogen in various end-use industries such as glass, electronics, welding and metal fabrication, and so on, the Latin American market is likely to see significant expansion.
Due to the increasing deployment of renewable energies such as solar and wind, as well as electric mobility, the Middle East and Africa are likely to hold a substantial proportion of the market.
ThyssenKrupp AG Focusing on New Contracts to Strengthen its Position
ThyssenKrupp AG is an international group of companies with a strong focus on green industrial engineering solutions and steel production. The company is based in Duisburg and Essen, Germany, and is spread across 60 countries worldwide. The company has 670 subsidiaries, and its product portfolio consists of steel production, machines, and industrial services to high-speed trains, elevators, shipbuilding, frigates, corvettes, and submarines.
An Infographic Representation of Alkaline Water Electrolysis Market
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The global alkaline water electrolysis market research report presents a comprehensive assessment of the industry by offering valuable insights, facts, industry-related information, and historical data. Several methodologies and approaches have been adopted to make meaningful assumptions and views to formulate the report. Furthermore, the report covers a detailed market analysis and information as per market segments, including type, applications, and regions, helping our readers to get a comprehensive overview of the global industry.
Value (USD Million) and Volume (MW)
By Type; Application; and Region
Fortune Business Insights says that the global market size was USD 100.47 million in 2020 and is projected to reach USD 180.03 million by 2028.
In 2020, Europe stood at USD 36.60 million.
Registering a CAGR of 6.5%, the market will exhibit moderate growth during the forecast period (2021-2028).
The power plant segment is anticipated to hold a significant market share during the forecast period.
The growing demand for green hydrogen as a fuel is expected to drive market growth during the forecast period.
Nel (Proton On-site), ThyssenKrupp AG, and Asahi Kasei, among others, are the key players operating across the market.
Europe dominated the market in terms of share in 2020.
In power plants, this type of electrolysis is widely used due to its high density and low maintenance.
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