DeepSeek forecast: The development trend of electrolytic water hydrogen production in China in the next 5 years

In the next five years (2025-2030), the development trend of China's electrolytic water hydrogen production industry is as follows:

First, the rapid expansion of production capacity, into the explosive growth period of new capacity continued high growth: in 2023, the new capacity of electrolytic water hydrogen production 37,000 tons/year (an increase of 181%), the cumulative capacity of 72,000 tons/year. It is expected that the annual production capacity will be accelerated in the next five years, and the proportion of planned projects will be as high as 82% (as of 2023), and the new production capacity will exceed 100,000 tons/year by 2025, and the cumulative production capacity may exceed 1 million tons/year. Policy-driven large-scale development: the National Energy Administration, The State Council and other multi-sectoral policies clearly support renewable energy hydrogen production, promote the landing of pilot demonstration projects, superimpose the "double carbon" goal, and the industry has entered the policy and market double dividend period. Second, the diversification of technical routes, PEM electrolytic cell into the mainstream direction alkaline electrolysis technology is still dominant: the current alkaline electrolytic water (AWE) due to low cost, high technical maturity, is still the mainstream route, will still occupy a large market share in the short term. However, its lack of flexibility and low efficiency may limit long-term development. Accelerated industrialization of PEM electrolyzer: PEM water electrolysis technology (PEMWE) with the advantages of fast response speed, high efficiency, and strong adaptability to renewable energy volatility, is expected to further reduce costs after 2025, and gradually replace alkaline electrolyzer to become the mainstream. For example, the cost of PEM electrolyzers in 2024 has been significantly reduced, and some projects have been commercialized. Emerging technology reserve: Although high temperature electrolysis technologies such as solid oxide electrolytic water (SOEC) are still in the research and development stage, they may become an important supplement in the future due to efficiency improvement (up to more than 70%). Third, the cost continues to decline, and the economy accelerates to show the reduction of renewable energy power costs: the expansion of wind installed capacity and the decline in electricity prices, promoting the total cost of electrolytic water hydrogen production close to coal hydrogen production (currently entered the economic range five years in advance). It is expected that by 2030, the cost of hydrogen production from electrolytic water may be reduced to 15-20 yuan per kilogram, significantly lower than industrial by-production of hydrogen. Equipment cost optimization: The scale effect of PEM electrolyzer and technology iteration will drive the equipment cost from 5,000 yuan/kW in 2023 to 3,000 yuan/kW in 2025, and the localization rate of electrolytic water technology will be increased to further compress costs. Fourth, the application scenario expansion, the downstream demand diversification of industrial demand outbreak: green hydrogen in refining, steel and other heavy industry substitution potential is huge, such as "green hydrogen refining project" is supported by the policy focus. It is expected that the demand for industrial hydrogen will reach 1.2 million tons/year in 2025. Penetration in the field of transportation and energy storage: the promotion of hydrogen fuel cell vehicles and the promotion of hydrogen energy storage demonstration projects will drive the growth of hydrogen demand. For example, China's fuel cell vehicle sales in 2023 exceeded 6,000 units, and the next five years may exceed 100,000 units. Distributed hydrogen production pilot: The application of distributed renewable energy hydrogen production technology (such as off-grid photovoltaic hydrogen production) in remote areas and industrial parks will gradually expand. Fifth, industry competition has intensified, and the concentration of leading enterprises in the market has increased: in 2024, the leading enterprises such as midship Parui Hydrogen Energy and solar Hydrogen energy occupy nearly 70% of the market share, and the future technical barriers and scale effects will concentrate the industry to a few leading enterprises. Deepening of industrial chain collaboration: upstream PV/wind power enterprises (such as Longi Green Energy), electrolytic cell manufacturers (such as CRRC, solar power) and downstream applications (such as petrochemical enterprises) form close cooperation to promote technology iteration and cost reduction. Power grid absorption pressure: electrolytic water hydrogen production requires large-scale access to the power grid, which may exacerbate the imbalance between power supply and demand in some regions in the short term. Technology substitution risk: If industrial by-product hydrogen purification technology breakthroughs or new hydrogen production technology (such as nuclear hydrogen production) scale, it may divert the demand for electrolytic water hydrogen production. Policy volatility risk: International hydrogen trade policies (such as carbon tariffs) and the decline of domestic subsidies may affect industry investment confidence.

Source: https://mp.weixin.qq.com/s/TXSKkpb1DWOQe4x4wNWJAA