Belgian manufacturer John Cockerill Group (JCG) plans to increase its annual production capacity of pressurized alkaline electrolyzers from 350 MW today to 8 GW by 2025, with new plants in China, Europe, India and in the Middle East, Reload can reveal.
The company is currently the world leader in the electrolyzer market, according to analyst BloombergNEF, with 33% of global sales in 2021. Among its competitors, only Norwegian Nel has unveiled a larger expansion plan, to build 10 GW of capacity by 2025.
JCG – named after its early 19th century English founder – previously announced plans to build a 1GW facility in Aspach, France, and 2 GW of production in Indiain partnership with local renewable energy developer Greenko Group, to add to its current 350 MW operation in Suzhou, China, through its wholly owned subsidiary Cockerill Jingli Hydrogen.
But Reload can disclose that JCG is expanding its Chinese plant to 1 GW and also plans to build a second 1 GW plant there by the end of next year; as well as a second 1 GW plant in Europe; 1 GW of production capacity in the Middle East and another 1 GW plant in an undisclosed region – a total of 8 GW – all by the end of 2025.
The first 350 MW production line in France will start producing electrolyzers in the second half of 2023, while a 1 GW plant will be built in India next year, which will immediately operate at full capacity, with a second installation of the same size after two to three years later.
“Beyond that, we are going to announce a second plant in Europe, also for 1,000 MW,” said renewable energy and hydrogen manager Raphaël Tilot. Reload. “It should be officially announced soon. Our objective is therefore, by 2025, to have 2,000 MW of capacity per year in Europe.
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“And we will also announce a plant somewhere in the Middle East, for that region, with a capacity of 1,000 MW, and the ambition is to start up between 2023 and 2024.”
He added that an eighth 1GW plant would also be built by the end of 2025, but could not reveal its location yet.
Application for electrolyser
Tilot says the electrolyser industry is still a relatively small niche market at present, where sales are currently relatively low ahead of an expected gigawatt-scale increase in the coming years.
“We take risks by anticipating investments…we are building capacity to stay ahead of demand, but we are only doing so to a certain extent,” he says, pointing to plans to start up some factories with limited production lines before later. expansion.
“We are not going to put [in] many gigawatts of capacity just sitting around and waiting for demand and subsidies to come or maybe not.
Indeed, Tilot expects its units to take some time to reach full capacity until the market takes off between 2023 and 2025.
Another “real risk”, he says, is that global demand for electrolyzers could soon exceed global supply.
“There is a real question about what will happen if indeed many of these [massive planned green hydrogen] projects come to fruition all of a sudden. We are involved in quite a few projects of several hundred megawatts, but also projects of several gigawatts. It is therefore not necessary to have a doctorate in mathematics to see that if these projects come to fruition [at the same time]it will not work.”
The traditional relationship between buyers and suppliers must evolve towards “more of a partnership discussion… so that we can anticipate their requests”.
“It’s not just about making the electrolyser, it’s about the supply chain. We buy materials, components. These suppliers are ahead of us in the chain, and they must also anticipate. So if a customer calls us and says “I will order 300 MW [of electrolysers]if I’m ready myself but haven’t pre-committed with my own suppliers, it won’t work.
And it’s not just component manufacturers in the green hydrogen supply chain – they also need wind and solar projects which require their own permits and equipment – and in many cases another bottleneck is the lack of subsidies that would make hydrogen renewable2 an interesting financial offer.
“What slows down applications in Europe are mainly subsidies,” explains Tilot. “The whole industry is waiting for EU subsidies. And once that happens, demand will take off.
“Today, we are working on a very large number of projects in Europe and outside Europe. Many projects outside of Europe are export driven, exporting from North Africa to Europe, or from the Middle East to the Far East or to Europe. And these projects are either waiting for some kind of financial support grants or they just need time to develop. People have to realize that it’s a whole supply chain, which has to be built from renewable energy production – wind farm, solar farm, the hydrogen production plant all the way to the ammonia production plant, sea transportation should be set up. So it takes time. »
The situation is different in China and India, at least for John Cockerill, he adds,
“We have great confidence in the Chinese market…the [national] hydrogen strategy has been decided, then they immediately move on to implementation. So what we’re seeing now is that we’re bidding on projects that will be built this year in China — and projects of several hundred megawatts. And people don’t have to wait and line up for years waiting for grants.
The Belgian points out that the electrolysers that JCG produces in China are different from those that it manufactures elsewhere. These machines are very much aimed at the Chinese market, where the initial investment costs are more important for customers than the longer-term discounted cost of hydrogen.
In India, JCG partner Greenko plans to purchase electrolysers for its own green hydrogen projects. “We are taking the risk of building a bigger factory [in India]but in a way, the risk is partially reduced because our partner takes some capacity,” says Tilot.
In terms of global demand, JCG is in talks with potential customers from a wide range of industries, “from the semiconductor industry to large energy utilities, oil and gas companies, mining companies, petrochemical companies”.
“Today, many of our customers ask us, as an electrolyser supplier, to participate in some of their engineering studies. And I think that’s a wise decision because it will ensure that the electrolyser is well integrated into the larger plants, as well as the interface and the sizing and everything… but we can’t meet all the needs of the customers from an engineering capability. The demand is simply too high.