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Power-to-X: Moving from MW-scale to GW-scale

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.

Posted 09 June 2020

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