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China’s Sungrow Power Supply Co Ltd (SHE:300274) is one of the world’s largest solar inverter manufacturers, with an annual capacity of 305 GW. While the company is currently busy meeting the high demand for its core products, it is also looking to expand into the electrolyser market.

At a recent event at the Solarplaza Summit Romania Solarplaza Summit in Bucharest, Robert von Wall, head of the CEE region at Sangro, said that strong demand amid a consolidating inverter market is leading to long delivery times of around half a year. He predicted that the situation will be settled in the third quarter of 2024.

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He also shared that Sangro has set up a five-person team in Munich working to bring the electrolyzers to market. Renewables Now reached out to von Wall with a few questions about the move.

Question. Can you tell us more about the decision to create a team to develop the electrolyser market in Europe? What are the main goals and strategies of this team?

Answer: We created a dedicated team in Europe to focus on the development of the electrolyser market due to its growing importance in the hydrogen industry. The main goals of this team are to promote innovation, technology development and partnership promotion in the European market. Our strategy includes collaborating with key stakeholders, conducting market research and developing cutting-edge electrolyser solutions that meet the region’s green hydrogen demand. Through this team, we aim to contribute to the decarbonisation of various sectors by promoting the adoption of electrolysis technology and facilitating the transition to a sustainable hydrogen economy.

Question. With the increasing focus on hydrogen technologies, what opportunities and challenges do you see in the European electrolyser market?

Answer: Demand for green hydrogen is growing in Europe as countries strive to meet their carbon reduction targets. This creates significant market opportunities for electrolyzers. European countries implement supportive policies and regulations, such as incentives and subsidies, to promote the adoption of hydrogen technologies. These measures create a favorable business environment for electrolyser manufacturers. Moreover, the creation of hydrogen infrastructure, including hydrogen charging stations and pipeline networks, opens up opportunities for the deployment of electrolysers and the integration of hydrogen in various sectors. However, there are also some challenges for the hydrogen market. One of the main challenges is achieving price competitiveness of electrolyzers compared to traditional fossil fuel-based technologies. Reducing costs and increasing production volumes are critical to making electrolyzers economically viable. Electrolyzer technology is still evolving, and further advances are needed to improve efficiency, robustness, and scalability. Research and development efforts are needed to overcome the technical challenges. Last but not least, the development of a secure supply chain and infrastructure for electrolyzer components such as catalysts and membranes is essential to meet the growing demand and ensure a reliable and efficient supply of electrolyzers.

Question. In terms of product differentiation, what sets Sungrow electrolyzers apart from the competition? Are they home grown?

A: Our electrolysers are developed with our in-house technological expertise. They are designed to be highly customizable and scalable, allowing us to meet different customer requirements. Our offerings can include auxiliary equipment, control systems and support services, providing a holistic approach to meet customer needs. In addition, our experience in the PV industry helps us a lot. We can design and implement integrated systems that include PV arrays, energy conversion, energy storage and electrolyzers, optimizing overall system performance and efficiency.

Q: According to BNEF data, Sungrow had 1.1GW electrolyser production capacity in 2022 (1GW ALK and 0.1GW PEM electrolysers). Can you provide more details on current production capacity and potential expansion plans, including consideration of other locations in light of recent policy support from various governments?

A. The current capacity situation may refer to Bloomberg data, while we expand the second phase of the plant, which will at least double production capacity. We do not rule out the possibility of considering other production locations. However, this will require a comprehensive consideration of market size, support policies, industry chain maturity, etc.

Question. What are the key applications or industries that Sungrow is targeting with its electrolysers? Are there specific regions or countries where you see significant market potential?

Answer: Our company’s electrolysers are targeted at a variety of applications and industries to meet the growing demand for hydrogen. A few key areas of focus are energy, industrial hydrogen as a feedstock or process fuel, mobility and the transport sector. In terms of market potential, we see significant opportunities in several regions and countries such as Asia-Pacific, Europe, Middle East, etc. In particular, the European market shows great potential thanks to ambitious hydrogen strategies and targets set by various European Union countries. . Supportive policies, incentives and financing mechanisms are driving the adoption of hydrogen technology, making it a key market for our electrolysers. While these regions represent significant market potential, we remain open to global opportunities and are committed to supporting the transition to a sustainable hydrogen economy where our expertise and products can create value.

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