The Global Pipeline For Green Hydrogen Projects Is
The global pipeline for green hydrogen projects is growing fast, with
a current target of 206 gigawatts (GW) in installed electrolyzer
capacity by 2040. However, a Rystad Energy analysis reveals that the
locations of the planned projects are overwhelmingly in areas where
water is in short supply. This means that an additional desalination
market needs to be created to produce most of the 620 million cubic
meters of water that these projects will need.
Research and development is under way to add and improve the built-in
desalination capability of hydrogen projects, but many desalination
installations will need to be external – and for the hydrogen to be
“green”, they must be fed by additional clean, renewable power.
The current pipeline of projects aims to produce about 30 million
tonnes of hydrogen per year by 2040, with an annual requirement of 620
million cubic meters of purified water. More than 70% of these
hydrogen electrolyzer projects will be located in water-stressed areas
such as Spain and Chile, and as a result nearly 85% of the hydrogen
capacity lined up for 2040 may need to source water supply via
To ensure the hydrogen produced is green, additional renewable energy
capacity will be required for the desalination process, as currently
only 1% of global desalination projects are powered by renewables.
Most operating desalination plants use thermal energy or power from
the local grid.
“Using water to produce clean hydrogen will be a key factor for the
energy transition, but most of the world’s planned green hydrogen
projects are to be located in water-stressed regions. This creates a
need for growth in the desalination market, and for more renewable
energy to power it, adding more costs for developers – but also
opportunities for suppliers,“ says Minh Khoi Le, renewable energy
analyst at Rystad Energy.
The top five regions by planned green hydrogen capacity are currently
Australia, Western Europe, Central Asia, West Africa and the Middle
East. Except for Western Europe, all these regions have medium or
higher water-stress levels, according to peer-reviewed information
from the World Resource Institute, which means the demand for fresh
water is starting to threaten supply capacity. There are also several
hydrogen electrolyzer projects in countries with high levels of water
stress outside of these five regions – Spain and Chile, for instance,
are among the countries with the highest water stress and currently
have a combined 42 projects planned, with more expected to come.
Our analysis finds that 14 green electrolyzer projects are planned in
countries with extremely high water-stress levels, 53 projects are in
countries with high water stress, and 162 projects are located in
regions with medium to high water stress. Hydrogen electrolyzer
projects in the high to extremely high water-stressed countries will
almost certainly require desalination for their water supply –
potentially implying a demand of 125.7 million cubic meters of water
annually for desalination by 2040. Some notable green hydrogen
projects in Oman (Alwusta) and Saudi Arabia (Neom) as well as numerous
projects in Spain will be in this category.
Demand for desalination could grow fivefold to 526 million cubic
meters by 2040 if all the hydrogen projects within regions with water
stress levels above medium are realized. This will include heavy
hitters in the green hydrogen pipeline such as projects in Australia
(e.g., TotalEnergies’ HyEnergy 5 GW electrolyzer) and Germany (e.g.
Aquaventus at 10 GW by 2035). The United Nations (UN) expects
freshwater demand to increase globally by 60% by 2025 − for
agriculture alone. Therefore, regions with water stress levels above
medium will most likely need to develop this additional desalination
capacity to support green hydrogen facilities.
While there are only a few projects in regions of low water stress,
many of these are located near shore and/or taking offshore wind as
feedstock (for instance in Western Europe and Brazil). If all these
projects add seawater desalination, total desalinated water demand for
green hydrogen would hit 620 million cubic meters by 2040.
There are currently only a handful of commercial-scale desalination
facilities that use renewable energy. Two of the biggest such
desalination projects are in Australia – both using wind power: the
Kwinana project is powered by the 80-megawatt (MW) Emu Downs wind
farm, while the Kurnell development is supplied by the 140 MW
Bungendore wind farm.
Solar PV also features in some desalination projects but on a smaller
scale, including at the Al Khafji and Yanbu 4 seawater reverse osmosis
plants in Saudi Arabia. Some commercial electrolyzer systems have
moved to include reverse osmosis desalination units.