Too soon, too late: An analysis of electrolyser supply and demand dynamics in Europe

Electrolysers are the primary equipment in green hydrogen production, imparting large CAPEX and OPEX for plant developers and operators. Challenges in the electrolyser industry have intensified, as manufacturers cite uncertainty and lower than expected order volumes. Despite these challenges, electrolysers and green hydrogen are still a major priority in the European energy transition, as fossil fuels become increasingly scarce and climate change progresses. In this paper, we assess the validity of the claims regarding stagnant demand, by building a transparent and reproducible modeling framework that integrates heterogeneous data sources into a coherent model capable of evaluating electrolyser supply-demand imbalances. Our approach also enables scenario-based capacity planning, allowing for estimating long term technology adoption trends and assisting in capacity planning for the electrolyser industry. Firstly, data was collected from public statements, company announcements and earnings reports for all identified small, medium and large electrolyser manufacturers in Europe, emphasizing any reports citing ongoing challenges faced by individual firms, as well as claims of stagnant demand. In the second part of the paper, we have looked at publicly available data from the International Energy Agency (IEA) and The European Hydrogen Observatory to estimate present electrolyser demand, and evaluate the outlooks provided by major institutions regarding green hydrogen in Europe. Our modeling framework then combines these datasets to estimate net supply-demand gaps over time, introducing a dynamic tool to support industry and policy makers. • Electrolyser manufacturing capacity and demand are unevenly distributed between Northwestern Europe and the rest of the EU. • Electrolyser manufacturing capacity and demand are evenly distributed between PEM and alkaline technologies. • Based on heterogeneous data, European electrolyser manufacturing capacity exceeds European demand by 2.5 GW, in 2025. • Per logistic curve estimation, post-2027 demand growth leads to under-capacity, reaching a maximum of 17 GW by 2033. • In the long-term, persistent oversupply post-2041 signals a mature industry, driven primarily by system replacements.