The hydrogen industry must face a “sobering” market reality and move beyond the early hype if it is to deliver on its promise of decarbonising hard-to-abate sectors.
That was the message from a recent H2 View webinar featuring engineering firm ABB and Ontario-based technology company Hydrogen Optimized, who said long-term cost efficiency and system reliability, not just upfront capital expenditure, will determine project viability going forward.
While green hydrogen has seen strong momentum in recent years, recent headwinds driven by rising costs and an increased focus on blue hydrogen have slowed progress.
“The market situation is not an easy one,” said Denis Krude, President and CEO of Hydrogen Optimized. “I would call it rather a sobering [sic] in the market.” He cited inflation, shifting political priorities, and lagging investments in distribution and offtake as key barriers.
Michael Marti, Head of Growth Industries at ABB Process Industries, added that the pause in investment offers an opportunity to reassess. “There was maybe a lot of overestimating and some hyping up of demand. I think it’s a healthy exercise to rethink a bit and take a step back.”
Central to both companies’ approach is a focus on total cost of ownership (TCO). While many developers are drawn to the lowest initial CapEx, this often results in higher operational expenditure over time, particularly in energy-intensive applications like electrolysis.
“CapEx is just one parameter,” said Krude. “Often the OpEx plays a much bigger role, sometimes 60 to 80% of total cost.”
Hydrogen Optimized’s RocketCell electrolysers are designed to be modular and scalable up to gigawatt levels, with a long design life and flexible operating range. Krude said the technology can be tuned depending on whether a customer prioritises upfront cost or long-term efficiency.
ABB, meanwhile, provides the high-power rectifiers, automation, and robotics that link renewable electricity supply to hydrogen production.
“Our recommendation is to sometimes pay a bit more upfront,” said Marti. “Because over a 20-plus year lifecycle, that efficiency pays off massively.”
The two companies are also seeing a shift in project scale and strategy. While early ambitions focused on multi-hundred-megawatt installations, many developers are now leaning towards smaller, distributed systems to better align hydrogen production with demand and reduce logistics costs.
Both speakers stressed the importance of early supplier involvement to optimise system design and reduce lifecycle inefficiencies.
“We’re not just equipment suppliers,” said Krude. “We act as consultants and partners to optimise the entire business case.”
