Emission Control: Electrolyser boom can pave way for cheaper green hydrogen

17 March 2023
Article by Australian Business Review

Emission Control: Electrolyser boom can pave way for cheaper green hydrogen

Green hydrogen produced from renewables via electrolysis is set to be at the very heart of the energy transition as more countries foster decarbonisation strategies to meet net-zero targets. But as it stands, roughly 95 per cent of the world’s hydrogen is made using fossil fuels. Green hydrogen comprises a paltry remaining 5 per cent.

New data out of Norwegian-based Rystad Energy, an independent energy research firm, suggests 2023 might be the start of a long slog for this nascent sector, with electrolyser manufacturing capacity set to grow by 186 per cent from 2022 to 2023.

This is good news for green hydrogen production – more manufacturing capacity means more electrolysers can be built and economies of scale could result in the reduction of costs.

In fact, by 2030, the Norwegian based company estimates green hydrogen production will reach 24Mt from 212 gigawatts (GW) of electrolysers, fuelled by the latest round of incentives such as the US Inflation Reduction Act and Europe’s multitude of support schemes.

Focus shifting to raw materials

Rystad says attention is now turning to the supply chain capacity necessary for electrolyser production.

Currently, the two most common electrolyser technologies are alkaline water electrolysis (AWE) and polymer electrolyte membrane (PEM).

Both PEM electrolysers and AWE electrolysers have experienced particularly high inflation in the past two years – on average prices for PEM electrolyser components have spiked around 30 per cent, while AWE costs increased around 21 per cent over the 2020-2022 period.

Platinum group metals (PGMs) such as platinum and iridium are key ingredients in PEM electrolysers and are also some of the rarest materials in the world, with iridium only found in two parts per billion (ppb) in the Earth’s crust and platinum in five ppb.

The price volatility of these two materials has contributed to the recent inflation seen hitting catalyst-coated membranes, the component which splits the water into hydrogen and oxygen.


ASX player poised to do its bit

Rystad Energy supply chain analyst Selena Remmen says in the short term, electrolyser prices will start to decrease as the price of key raw materials stabilises.

In medium to longer term, Remmen says technological innovation and efficiency gains will reduce the need for iridium, resulting in a significant cost reduction.

“However, unexpected jumps in costs could occur as iridium faces supply pressures as key producer South Africa faces power outages,” she explains.

“This demonstrates how the energy transition will not be predictable, with many betting that green hydrogen will take a similar path to photovoltaics which saw investment costs drop by around 80 per cent between 2010 and 2020.”

In Australia, one junior miner positioned to cash in on this opportunity is Podium Minerals (ASX:POD), the owner of a 15km-long bulk tonnage PGM deposit at its Park Reef project in Western Australia.

The company wants to be Australia’s first platinum group metals producer and believes it is well placed to support the emerging demand from hydrogen electrolysers and hydrogen fuel cell technologies.

Podium says it has made a significant breakthrough at Parks Reef, with world-leading recoveries of more than 90 per cent platinum achieved, using the company’s atmospheric leach process.

The recoveries, which were achieved with both oxide and sulphide ores under certain atmospheric leach conditions, represent a 30 per cent increase on previous oxide recoveries and 50 per cent gain on previously reported platinum recoveries.

The process also improved recoveries of iridium, nickel and cobalt.