The revision came in the IEA’s ‘Renewables 2023’ report, which said just 7% — 45GW — of new power capacity between 2023 and 2028 would be dedicated to hydrogen.
Lack of off-takers and the impact of higher prices on production costs influenced the slowdown, the IEA said, causing delays to final investment decisions.
Other uncertainties cited in the report included a lack of clarity on definitions for low-emission hydrogen, and whether infrastructure for international hydrogen-based fuel trading will be operational by 2028. Markets that have limited domestic demand for hydrogen were waiting for an international hydrogen market to develop, it said.
Overall China, Saudi Arabia and the United States were forecast to account for more than 75 percent of renewable capacity for hydrogen production by 2028.
In the EU, IEA’s hydrogen projections were down significantly compared with its 2022 data. Financial closure for electrolyser projects in Sweden, the Netherlands, Spain and Germany were progressing more slowly than expected, the report said.
Hydrogen is expected to play a larger role in solar and wind investments based in markets focused on exporting. By 2028, according to the report, hydrogen exporting countries could account for over one-fifth of hydrogen-driven renewable capacity deployment, led by Saudi Arabia, Australia, Oman and the United Arab Emirates.
In North Africa and the Middle East, hydrogen accounted for more than 13% of the region’s renewable capacity growth “thanks to government policies to stimulate development for trade”, as well as land availability and existing port infrastructure.
The report meanwhile said government support was crucial to developing projects in these markets. For example, Saudi Arabia’s 2GW Neom electrolyser project is partially owned by the state and has received funding from the National Development Fund and Saudi Industrial Development Fund.
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