Water Electrolysis Market Size, Share, Growth, And Industry Analysis by Type (Traditional Alkaline Electroliser, PEM Electroliser) by Application (Power Plants, Steel Plant, Electronics and Photovoltaics, Industrial Gases, Energy Storage or Fueling for FCEV's, Power to Gas & Others) Regional Forecast From 2023 To 2031

Updated On: 22 April 2024

WATER ELECTROLYSIS MARKET REPORT OVERVIEW 

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The global water electrolysis market size was USD 458.3 million in 2022 & the market is expected to reach USD 8608 million in 2031, exhibiting a CAGR of 38.5 % during the forecast period. 

The global COVID-19 pandemic has been unprecedented and staggering, with water electrolysis market experiencing higher-than-anticipated demand across all regions compared to pre-pandemic levels. The sudden rise in CAGR is attributable to the market's growth and demand returning to pre-pandemic levels once the pandemic is over. 

Water electrolysis is a process that involves splitting water molecules into hydrogen and oxygen using an electrical current. It is a form of electrolysis where water is used as the electrolyte, and an electric current is passed through the water to cause the reaction. The process is commonly used in industrial applications to produce hydrogen gas for various purposes, including fuel for vehicles and industrial processes. Water electrolysis has several practical applications. It is used in the production of hydrogen gas, which is a clean and renewable source of fuel that can be used in various industries. Hydrogen gas can also be used as a fuel for vehicles, and water electrolysis can be used to produce hydrogen fuel cells that can power electric vehicles.

The market for water electrolysis is growing rapidly due to the increasing demand for clean and renewable sources of energy. With the rise of concerns about climate change and the need to reduce greenhouse gas emissions, there is a growing demand for technologies that can produce clean and sustainable energy. Moreover, the increasing adoption of electric vehicles has also contributed to the growth of the water electrolysis market size. Hydrogen fuel cells, which are powered by hydrogen gas produced through water electrolysis, are a promising alternative to traditional battery-powered electric vehicles. They offer faster refueling times and longer driving ranges, making them more practical for long-distance travel.

COVID-19 Impact: The Pandemic Had A Huge Impact On The Market, Providing Both Challenges And Opportunities For Businesses In This Market

During the early stages of the pandemic, there was a significant drop in demand for hydrogen fuel for transportation and industrial processes, as many businesses and industries were forced to shut down or reduce operations. This led to a decrease in production and sales of water electrolysis equipment and hydrogen fuel cells. Furthermore, supply chain disruptions caused by travel restrictions and other measures taken to control the spread of the virus also had an impact on the market.

However, the pandemic has also led to an increased interest in renewable energy and sustainable energy sources, as governments and businesses look for ways to support a green recovery from the pandemic. This has created new opportunities for the water electrolysis market, as the technology is seen as a promising solution for producing clean and renewable hydrogen fuel. The European Union, for example, has announced plans to invest in hydrogen production and infrastructure as part of its COVID-19 recovery plan, which is expected to boost the demand for water electrolysis technology in the region. 

Latest Trends

"The Creation Of Enhanced Electrolysis Technologies That Offer More Efficiency And Lower Prices Is One Of The Major Industry Trends Today"

One new product that has generated a lot of interest is the "solid oxide electrolysis cell" (SOEC), which is a type of high-temperature electrolysis technology. SOECs offer several advantages over traditional alkaline and proton exchange membrane (PEM) electrolysis technologies, including higher conversion efficiencies and the ability to use renewable energy sources directly. Another trend in the market is the development of "green hydrogen" production methods, which use renewable energy sources such as wind and solar power to power the electrolysis process. This has led to the launch of several new products and technologies, including hydrogen refueling stations that use renewable energy to produce hydrogen fuel for transportation.

Leading players in the water electrolysis market are also upping their game, with many investing in research and development to improve their products and expand their market share. For example, Siemens Energy has recently launched a new electrolysis platform called "Silyzer" that uses PEM technology to produce hydrogen fuel. The company is also working on developing a new generation of SOECs that offer improved performance and lower costs. Other leading players in the market, such as Nel Hydrogen, ITM Power, and McPhy Energy, are also investing in research and development to improve their products and expand their market reach. Nel Hydrogen, for example, has recently announced plans to build a large-scale electrolysis plant in Norway that will use renewable energy sources to produce green hydrogen. 

WATER ELECTROLYSIS MARKET SEGMENTATION

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• By type

Depending on water electrolysis  given are types: Traditional Alkaline Electroliser, PEM Electroliser. The Traditional Alkaline Electroliser type will capture the maximum market share through 2031.

• By Application

The market is divided in Power Plants, Steel Plant, Electronics and Photovoltaics, Industrial Gases, Energy Storage or Fueling for FCEV's, Power to Gas & Others based on application. The global water electrolysis market  players in cover segment like Power Plants will dominate the market share during 2022-2031.

Driving Factors

"The Growing Emphasis On Decarbonization And The Shift To A More Sustainable Energy Future Is One Of The Major Market-Driving Forces"

As concerns about climate change continue to grow, there is a growing demand for technologies that can produce clean and renewable sources of energy, such as hydrogen fuel produced through water electrolysis. Governments and businesses around the world are setting ambitious targets for reducing greenhouse gas emissions and transitioning to a green economy, which is driving the demand for technologies like water electrolysis. For example, the European Union has set a target of achieving net-zero greenhouse gas emissions by 2050 and plans to invest heavily in hydrogen production and infrastructure as part of its COVID-19 recovery plan.

In addition, the increasing adoption of electric vehicles is also driving the demand for hydrogen fuel produced through water electrolysis. Hydrogen fuel cells, which are powered by hydrogen gas produced through water electrolysis, offer several advantages over traditional battery-powered electric vehicles, including longer driving ranges and faster refueling times. Overall, the increasing focus on decarbonization and the transition to a more sustainable energy future is a key driving factor for the water electrolysis market growth, as businesses and governments seek to invest in clean and renewable energy sources to reduce greenhouse gas emissions and support a more sustainable future.

"The Growing Accessibility Of Renewable Energy Sources Like Wind And Solar Electricity Is Another Important Market-Driving Factor For Water Electrolysis"

Renewable energy sources offer several advantages over traditional fossil fuels, including lower greenhouse gas emissions and greater energy security, which is driving the demand for technologies like water electrolysis that can produce clean and renewable sources of energy. Renewable energy sources are becoming increasingly affordable and accessible, which is driving their adoption and creating new opportunities for the water electrolysis market. The cost of solar and wind power has been declining rapidly in recent years, making these sources of energy more competitive with traditional fossil fuels. In addition, advancements in energy storage technology are making it possible to store excess energy from renewable sources, which can be used to power the electrolysis process and produce hydrogen fuel.

Governments and businesses around the world are also investing heavily in renewable energy sources, which is driving the demand for technologies like water electrolysis that can produce clean and renewable energy. For example, the International Energy Agency (IEA) has projected that renewable energy will be the fastest-growing source of electricity generation over the next decade, with solar and wind power expected to make up the majority of this growth. Overall, the increasing availability and affordability of renewable energy sources is a key driving factor for the water electrolysis market growth, as businesses and governments seek to invest in clean and renewable energy sources to reduce greenhouse gas emissions and support a more sustainable future. As renewable energy sources continue to become more competitive and accessible, the demand for water electrolysis technology is expected to continue to grow.

Restraining Factors

"Lack Of Regulatory Standards And Expensive Technical Costs Are Seen To Be Factors Limiting The Market's Expansion"

One restraining factor affecting the growth of the water electrolysis market is the high cost of the technology. Water electrolysis requires a significant amount of energy to produce hydrogen, which can be costly. Additionally, the infrastructure needed to transport, store, and use hydrogen is also expensive. As a result, the cost of producing and using hydrogen from water electrolysis can be higher than that of traditional fossil fuels, which can deter some potential customers from adopting the technology.

Another factor that can restrain the growth of the water electrolysis market is the lack of a comprehensive regulatory framework. While many countries have set targets for reducing greenhouse gas emissions and promoting clean energy, there is no global standard for the production, transportation, and use of hydrogen. This lack of standardization can create uncertainty for companies looking to invest in water electrolysis technology, as they may be unsure of how their products and services will be regulated.

WATER ELECTROLYSIS MARKET REGIONAL INSIGHTS 

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"The Asia-Pacific Area Is Regarded As The Leading Region And Is Anticipated To Keep Expanding Quickly In The Years To Come"

The Asia-Pacific region is expected to be the leading region in the water electrolysis market in the coming years. The region has a rapidly growing demand for hydrogen as a clean energy source, and water electrolysis is a key process for producing hydrogen. One of the main drivers of the growth in the Asia-Pacific region is the increasing demand for clean energy in countries such as China, India, and Japan. These countries are looking to reduce their reliance on fossil fuels and are turning to hydrogen as a clean energy source. Water electrolysis is a key process for producing hydrogen, which is driving the growth of the market in this region. The Asia-Pacific region is also home to some of the leading players in the water electrolysis market. Companies such as ITM Power, Nel ASA, and Toshiba are investing heavily in research and development in this region to improve the efficiency and cost-effectiveness of water electrolysis technology. Additionally, the Asia-Pacific region has several government initiatives in place to promote clean energy and reduce greenhouse gas emissions. For example, Japan has set a target to achieve net-zero greenhouse gas emissions by 2050, and China is investing heavily in clean energy infrastructure. These initiatives are creating a favorable environment for the growth of the water electrolysis market share in this region. 

Europe is currently the second leading region in the water electrolysis market and is expected to continue to be a major player in the future. The region is home to several key players in the industry and has a strong focus on renewable energy and reducing greenhouse gas emissions. Several countries in Europe have set ambitious targets for reducing their carbon footprint and are investing heavily in clean energy technologies such as water electrolysis. For example, the European Union has set a goal of reducing greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels. To achieve this goal, the EU is investing in a range of clean energy technologies, including hydrogen production from water electrolysis. Additionally, Europe has a strong focus on research and development, which is driving innovation in the water electrolysis market share. Many European companies are investing in improving the efficiency and cost-effectiveness of water electrolysis and developing new technologies for producing and using hydrogen.

Key Industry Players

"Key Players Focus on Partnerships to Gain a Competitive Advantage "

Prominent market players are making collaborative efforts by partnering with other companies to stay ahead of the competition. Many companies are also investing in new product launches to expand their product portfolio. Mergers and acquisitions are also among the key strategies used by players to expand their product portfolios.

List of Market Players Profiled

• 718th Research Institute of CSIC (China)
• Suzhou Jingli (China)
• Proton On-Site (U.S)
• Cummins (U.S)
• Siemens (Germany)
• Teledyne Energy Systems (U.S)
• EM Solution (U.S)
• McPhy (France)
• Nel Hydrogen (Norway)
• Toshiba (Japan)
• TianJin Mainland (China)
• Yangzhou Chungdean Hydrogen Equipment (China)
• Elogen (France)
• Erredue SpA (Italy)
• Kobelco Eco-Solutions (Japan)
• ITM Power (U.K)
• Idroenergy Spa (italy)
• ShaanXi HuaQin (China)
• Beijing Zhongdian (China)
• Elchemtech (South Korea)
• H2B2 (Spain)
• Verde LLC (U.S)

Report Coverage

This research profiles a report with extensive studies that take into description the firms that exist in the market affecting the forecasting period. With detailed studies done, it also offers a comprehensive analysis by inspecting the factors like segmentation, opportunities, industrial developments, trends, growth, size, share, and restraints. This analysis is subject to alteration if the key players and probable analysis of market dynamics change.