The IEA expects that at least 50GW of renewable power capacity will be installed globally for hydrogen production by 2027, but this could rise to 90GW if certain challenges are addressed.
Renewable capacity additions for hydrogen production could account for around 2pc of the entire global renewable power build out over the 2022-27 period, the IEA said in its Renewables 2022 report today.
Of the 50GW, China will account for around 18GW — split into 10GW of solar photovoltaic capacity and 8GW of onshore wind capacity — based on the IEA's projections. China is pursuing ambitious plans to expand renewable hydrogen production capacity in the coming years as it seeks to decarbonise industrial processes and mobility applications. But the IEA said the country's capacity build-out comes with a lot of uncertainties, for instance related to transport infrastructure limitations.
Europe will deploy 7GW of renewable power capacity dedicated to hydrogen production, with Spain accounting for half of this, the IEA said.
In some regions, renewable capacity additions for hydrogen production will account for a much larger share of overall additions than the 2pc forecast globally. The share will be highest in Chile, where around 5GW could be added for hydrogen production, making up around 20pc of the country's overall additions. This will come almost exclusively in the form of onshore wind, based on the IEA projections. The share could also be well above the global average in the Middle East and north Africa region, at around 14pc, and in Australia, at 17pc.
The IEA said its 50GW forecast is based on a "conservative approach" that takes into account "the considerable number of policy uncertainties, market challenges and project-specific variables affecting dedicated renewable capacity growth." To get to 90GW it said large projects need to secure buyers — potentially with the help of policy actions — and governments must provide regulatory certainty over definitions of low-carbon hydrogen. Project developers have repeatedly said that a lack of definitions around what counts as renewable hydrogen is holding back final investment decisions, especially in Europe.
