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Globally, installed power-to-X (production of low-carbon fuels
gas or liquid fuels from renewable electricity) capacity stands at
just over 100MW, but the pipeline through 2030 now exceeds 11
GW.
The number of projects is growing strongly, but more importantly
individual projects are getting much larger. The largest operating
Power-to-X project is 10MW, with a 20MW facility is under
construction, but recent announcements are for projects on the
gigawatt scale.This increase in the size of individual projects
matters as IHS Markit estimate that over 70% of the reduction in
the cost of electrolysis expected through 2025 will be from of
larger projects with the greatest benefits seen in scaling up to
50-100MW. By 2023 these benefits will have been realized.
The IHS Markit Power-to-X tracker
shows the average size of power-to-X projects scheduled for 2023 is
100MW.
Figure 1: Power-to-X project pipeline up to 2030 (as of May
2020)
Geographic diversity is also increasing. Up to now power-to-X
has been a largely European endeavor with 70% of the
installed/under construction capacity in Europe. While Europe will
remain a key market, Australia will become increasingly important.
Based on the current pipeline it would become that largest single
market for electrolysis by 2030—almost half of the most
recently announced projects are in Australia.
On the back of this growth in the pipeline we are seeing huge
increases in investment. Investment in power-to-X was around $30m
in 2019. By 2023 this is expected to top $700m. Furthermore,
power-to-X is proving highly resilient to the current downturn with
announcements of major new projects made at the height of the
COVID-19 turmoil. Indeed, it seems that power-to-X (and low-carbon
gas) will prove to be one of the main beneficiaries of plans to
ensure a climate-compatible recovery from COVID-19.
The analysis in this post draws insight from the IHS Markit
Hydrogen and Renewable Gas Forum.
Learn more.
IHS Markit experts are available for consultation on the
industries and subjects they specialize in. Meetings are virtual
and can be tailored to focus on your areas of inquiry. Book
in a consultation with Catherine Robinson.
Catherine Robinson is an Executive Director of the Gas,
Power and Energy Futures team at IHS Markit. Dr. Soufien Taamallah is Director of Energy Technologies
and Hydrogen Research at IHS Markit.
