SOEC Electrolyzer Market - Forecasts from 2024 to 2029

SOEC Electrolyzer Market - Forecasts from 2024 to 2029

SOEC Electrolyzer Market is expected to grow at a CAGR of 59.71% from US$79.466 billion in 2022 to US$3,363.418 billion in 2029.

It has solid oxide fuel cell technology to create a dependable electrolysis stack, enabling the production of hydrogen through steam electrolysis or the synthesis of gas (comprising hydrogen and carbon monoxide) through water vapor and carbon dioxide co-electrolysis. The solid oxide electrolysis cell (SOEC) technology also exhibits the capability to concurrently generate high-purity oxygen from these input sources. Notably, OxEon (the company) has achieved success in extracting high-purity oxygen from a simulated Martian atmosphere, showcasing the versatility of the technology.

The applications of SOECs extend to producing hydrogen for diverse purposes, including transportation, industrial processes, and power generation. Furthermore, SOECs play a crucial role in converting surplus renewable energy into hydrogen, facilitating its storage for subsequent use in power generation. Another noteworthy application involves the co-production of hydrogen and syngas, a combination of hydrogen and carbon monoxide, which finds utility in various processes such as the production of synthetic fuels.

The expansion in hydrogen production using SOECs is propelled by a confluence of factors: the rising demand for clean hydrogen, supportive government policies and incentives, and continuous technological advancements that enhance the efficiency and viability of the production processes. This creates a conducive environment for the widespread adoption of SOEC technology in meeting the growing global demand for sustainable and clean energy solutions.

Market Drivers

The energy and power industry is expected to show significant growth in the coming years-

The energy and power industry is expected to show significant growth in the coming years owing to favorable investment inflows, and initiatives to enhance clean energy infrastructure. According to the data provided by the International Energy Agency, the global investment in clean energy reached US$1,617 billion which signified an increase of 14.8% over 2021’s investments. Also, as per the same source, global investments are expected to reach US$1,740 billion in 2023.

Moreover, investments in fossil fuels witnessed a slight growth of 4.7% in 2022, however, the growing nations' efforts to reduce their carbon footprint are expected to halt the usage of fossil fuels thereby restraining investments in such sources.

The energy industry relates to producing and supplying energy produced via fossil fuels and renewable sources. Such a sector plays a vital role in promoting industrial growth thereby providing fuel for the upliftment of an economy.

Rapid industrialization coupled with favourable investments in the same has increased the energy consumption scale, for instance, according to the International Energy Agency, in 2022, industrial sectors accounted for 37% of the global energy usage reaching 166EJ. Furthermore, as per the same source, industrial energy productivity is expected to show a 3% increase per year till 2030, and electricity will account for up to 30% of industrial energy usage by 2030.

Moreover, various government initiatives and investments to bolster energy production, especially in renewable sources are anticipated to provide a major boost to the energy industry growth in the coming years. For instance, the Biden administration in June 2023 announced investments of US$45 million as a part of its “Investing in America” to accelerate domestic solar manufacturing in the country.
Demand due to growing industrial activities-

The burgeoning industrial activities and the rapid growth of residential and commercial establishments, driven by urbanization, have led to a surge in global energy demand, consequently boosting overall production capacity. According to the World Energy Outlook 2022 report by IES, the global energy supply in 2021 reached 624 EJ, marking a 5.4% increase from the 2020 supply volume of 592 EJ and a significant 15.1% increase from the 2010 production of 542 EJ.

The International Energy Agency reports that Europe's energy supply in 2021 amounted to 82.3 EJ (Exajoules), reflecting a 5.6% increase compared to the 2020 volume of 77.9 EJ. Concurrently, there has been a notable rise in energy demand in the region.

Europe is actively promoting the use of renewable energy sources such as solar and wind for electricity generation to address this growing demand. Various initiatives and investments have been launched across the region to enhance energy supply and establish clean energy infrastructure, thereby fostering growth in the SOEC electrolyzer market.

For instance, the REPowerEU Plan, introduced by the European Commission in May 2022, aims to bolster the production and storage of clean energy while diversifying energy supplies in Europe. These efforts are anticipated to offer a positive outlook for the growth of the SOEC electrolyzer market.

Restraint-
High cost of production-

SOEC systems are notably pricier compared to traditional hydrogen production methods such as steam methane reforming (SMR). This elevated initial investment presents a challenge for prospective users, particularly in industries where cost is a significant concern. The utilization of specialized materials like ceramic electrolytes and metallic interconnects notably adds to the overall system expenses. Moreover, the relatively limited market size in comparison to well-established technologies like SMR restricts the potential for cost reduction through economies of scale.

The SOEC electrolyzer market is segmented based on components into Balance of Plant (BOP) and Stack.

The SOEC electrolyzer market is segmented based on components, dividing it into Balance of Plant (BOP) and Stack. The Balance of Plant (BOP) encompasses all the components surrounding the stack, crucial for its functioning and seamless integration into a broader hydrogen production system. On the other hand, the Stack serves as the central component of the SOEC electrolyzer, playing a pivotal role in the water-splitting process itself.

Americas is anticipated to hold a significant share of the SOEC Electrolyzer Market-

Energy demand in major economies of the Americas region namely the United States, Canada, Mexico, and Brazil among others is witnessing a significant surge owing to the booming industrial productivity and population growth. Moreover, favourable initiatives to propel energy production via renewable sources coupled with growing oil and natural gas exploration operations are acting as an additional driving factor. According to the International Energy Agency’s “World Energy Outlook 2022,” the energy supply in the Americas stood at 139.9EJ which represented an increase of 4.8% over 2020’s energy supply of 133.5EJ.

Furthermore, as per the same source, the United States accounted for up to 62% of the total energy produced in the Americas for the year 2021, whereas other economies such as Brazil constituted 9.5% for the same year.

Market Developments
May 2023- Topsoe constructed of the world's first industrial-scale SOEC electrolyzer facility. With the completion of the new factory, Topsoe made a compelling case for SOEC technology at an industrial scale. The factory boasted an initial manufacturing capacity of 500MW. Topsoe's SOEC technology was stated to be up to 35 percent more efficient than conventional technologies, facilitating more efficient green hydrogen production to support global decarbonization targets.
May 2023- The world's largest solid-oxide hydrogen electrolyzer was installed at a NASA facility in California, as announced by Bloom Energy. The 4MW unit was said to be 20-25% more efficient than similarly sized alkaline or PEM machines. Bloom Energy, based in the US, stated that the installation took place and that the electrolyzer would produce 20-25% more hydrogen per megawatt compared to any commercially demonstrated alkaline or PEM equivalent.
April 2022- A groundbreaking milestone was reached with the World's Largest High-Temperature Electrolyzer achieving unprecedented efficiency. In a notable achievement, the electrolyzer successfully generated 200 Nm3 of green hydrogen per hour for the first time. Additionally, an electrical efficiency of 84% el, LHV has been demonstrated, marking a level of efficiency previously unparalleled in the field.

Company Products
FuelCell Energy Inc- FuelCell Energy Inc. offers high-efficiency solid oxide electrolysis technology for hydrogen production. Their Solid Oxide Electrolyzer Cell (SOEC) is engineered to achieve hydrogen production with 90 percent electrical efficiency, which can reach 100 percent efficiency when utilizing excess heat. The module features a compact design and operates quietly, making it suitable for placement near energy sources.
Bloom Energy- Bloom Energy initiated hydrogen generation using the world's largest solid oxide electrolyzer installation at NASA's Ames Research Center in Mountain View, California. This high-temperature, high-efficiency unit produces hydrogen at a rate 20-25% higher per megawatt (MW) compared to commercially demonstrated lower-temperature electrolyzers such as proton electrolyte membrane (PEM) or alkaline ones. The 4 MW Bloom Electrolyzer™, capable of producing over 2.4 metric tonnes of hydrogen per day, was constructed, installed, and operationalized within two months to showcase its rapid deployment capabilities.
Topsoe- The Company’s SOEC technology is meticulously engineered to seamlessly integrate with downstream processes, enabling the conversion of green hydrogen into various products like green ammonia for chemical applications or energy storage, methanol for chemical or transportation fuel production, and other green chemicals and fuels. TOPSOE™ stands out as one of the few companies equipped to offer the necessary insights and technology for facilitating the production and widespread availability of next-generation fuels and chemicals.

Market Segmentation
By Component
BOP
Stack
By Application
Hydrogen Production
Industrial Process
Others
By End-User
Power
Transportation
Refineries
Others
By Geography
Americas
USA
Others
Europe, Middle East and Africa
Germany
United Kingdom
Others
Asia Pacific
China
Japan
Others