Sustainable Energy – Credit Suisse Outlook on Hydrogen and Renewables in Europe
We review the debate beyond ‘Hydrogen 101’ primers to focus on which electrolysis technologies appear best positioned. We highlight advantages vs. peers that the market may have missed and where expectations may be too high.
Will hydrogen succeed at becoming a future energy carrier? Hydrogen is essential to reaching net-zero; as the world’s energy mix moves closer to renewables. The transport of molecules of energy (via hydrogen), rather than electrons is essential. The LCOH (levelised cost of hydrogen) gap between green and grey hydrogen has also fallen due to advances in electrolyser costs, efficiency, and supportive macro.
Which green hydrogen electrolysis technology will succeed long term? This will be a market for all technology given different advantages for end-market applications, e.g., SOE for ammonia production vs. pairing PEM with a wind turbine for energy storage. The two key technology considerations revolve around (1) system efficiency; and (2) system capex costs, to reduce the total cost to the customer, as energy costs (60-70% of LCOH) are in the control of the renewable side of our coverage.
Our analysis highlights that PEM will be dominant to 2050, with alkaline (ALK), Solid Oxide (SOE), and others, such as anion exchange membrane (AEM). Near term, the market is expected to be split evenly between ALK and PEM in the 2020s, while our industry survey respondents also highlight the advantages of SOE in industrial applications with materially higher efficiencies when excess heat is applied (such as in ammonia production).