Europe must not repeat the same mistakes it made with solar manufacturing in the emerging hydrogen sector, the executive director of the International Energy Agency (IEA) has warned.
A string of European research institutes and pioneering companies developed much of the technology still in use in PV panels today. But as solar began to scale in multiple international markets, coordinated national and regional support allowed Chinese manufacturers to get the upper hand over their rivals. Support in the forms of cheap land and warehouse facilities, as well as feed-in tariffs, helped companies like Suntech and Trina Solar to build scale and slash costs.
Chinese firms dominate the global PV panel market today, with a more than 60 percent market share. Jinko Solar and other market leaders have been adding huge volumes of additional manufacturing capacity this year.
Today, Europe would appear to be at the vanguard of the hydrogen economy. Speaking at the SolarPower Europe trade body’s summit, Fatih Birol warned against allowing history to repeat itself.
“Europe must not repeat the mistakes of the past that we saw with solar manufacturing,” Birol warned. “By pushing the costs of electrolyzers down and by manufacturing electrolyzers, Europe can also push down the cost of hydrogen,” which in turn can open up new opportunities for renewables.
Germany’s hydrogen project target of 5 gigawatts of electrolyzers by 2030 could require up to 20 terawatt-hours of electricity a year, according to the government’s hydrogen strategy.
Early days for electrolyzer firms
Industrial firms such as thyssenkrupp and the newly minted Siemens Energy are making big bets on green hydrogen. Together with specialist firms ITM Power in the U.K. and Nel in Norway, Europe will soon have a multi-gigawatt electrolyzer manufacturing capacity.
As well as becoming more numerous, electrolyzer deployments are also getting much larger. France's McPhy currently makes around 40 megawatts of electrolyzers annually. Nel is scaling from a similar starting position. Most green hydrogen demonstration projects are 10 or 20 MW, and full-scale industrial projects are running into the gigawatt scale. The EU is targeting 40 GW of domestic electrolyzer deployments by 2030.
Hydrogen has been a central theme in European recovery plans, including the EU’s trillion-euro package as policymakers look to marry job creation and carbon reduction.
IEA’s solar outlook for the EU
Birol told the online Solar Summit that the agency’s latest data forecast great things for European solar. If the EU were to stay on a net-zero path, solar will be the bloc's largest source of installed generation capacity by 2025. That is close to the generation-mix projections made by other analysts, including Wood Mackenzie.
The IEA has often been criticized for being too conservative about the growth of solar. Its next World Energy Outlook, set to be released next month, may strike a different tone.
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