RE: From Dennis on Linkedin15 Jun 2023 22:16
From H2 view on the visit to No 10
Despite the debate of green vs. blue, a session hearing from some of the major electrolyser manufacturers revealed that engineering, procurement and construction (EPC) costs and capacity was limiting scale-up and deployment.
Benjamin Haycraft, Executive Vice-President, EMEA at Plug Power, told the Summit, “What is required to build 5GW of electrolyser production by 2030 is actually in place,” and suggested that deploying electrolysers could prove harder.
“When it comes to very large-scale projects, will EPC players be able to cope with them?” Haycraft asked. “When you have an industry with such a high level of ambition, but you have players that are willing to take a full wrap only if they get a 20-year warranty and performances on the equipment, you have big tension here.”
“EPC costs have skyrockets,” he said. “There was a study from McKinsey which showed that in Chile, the cost of construction for an electrolyser plant has increased by 80% between 2020 and today, and that is not due to the cost of electrolysers themselves. It’s due to the cost of the whole plant and balance of plant.”
ITM Power’s CEO, Dennis Schulz, added, “if you look at the total EPC CAPEX of an electrolyser plant, the stock makes up around 30% and 70% is EPC, balance of plant and construction.”
Schulz continued to suggest that EPC costs have increased to due so few reference points in the market, essentially undertaking their work from scratch.
“In principle, all costs have gone up because of inflation,” he said. “We have energy prices going up, but I think large part of the EPC prices going up is because we need reference points.”
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