Municipal utilities plan 3,200 MW of electrolysis capacity

October 20, 2026

Source: E & M powernews

Research, patents, and funding for electrolysis technologies are on the rise. At the same time, an analysis by Fraunhofer ISI points to uncertain forecasts for the global electrolyzer market.

Research into electrolysis technologies for green hydrogen is gaining momentum worldwide. At the same time, it remains unclear how quickly an economically viable market will develop. This is shown by a recent analysis by the Fraunhofer Institute for Systems and Innovation Research (ISI) in Karlsruhe. In the study, the researchers examine research activities, patent applications, funding, and market forecasts. Hydrogen projects by municipal utilities and regional energy providers are also included in the analysis.

The analysis was conducted as part of the “H2 Companion” project, in which the Fraunhofer ISI provides scientific support to the green hydrogen model regions “H2-Wandel” and “H2 GeNeSiS” in Baden-Württemberg. According to the institute, scientific publications, patent applications, and public research funding have all increased significantly in recent years.

Germany Ranks Third in Research

Between 1827 and 2025, the publication analysis identified approximately 106,000 scientific publications on electrolysis. Since 2020, growth has accelerated in all three technology areas examined. Germany ranks third worldwide and leads the European analysis. China and the U.S. are in the lead.

The study distinguishes between alkaline electrolysis or anion-exchange membrane electrolysis (AEL/AEM), proton-exchange membrane electrolysis (PEM), and high-temperature electrolysis (HT). AEL is considered to be industrially established, while PEM can respond particularly quickly to fluctuations in renewable electricity generation. High-temperature electrolysis promises high efficiency but places high demands on materials and service life.

Public funding has also increased. As of July 2026, the Fraunhofer ISI had recorded 156 major collaborative projects and 92 individual projects with a clear focus on electrolysis in the German funding database “EnArgus.” The total funding for these projects amounts to more than 3.6 billion euros. The focus is primarily on the more market-ready PEM and AEL processes.

At the EU level, researchers identified a total of 216 funded project consortia for electrolytic hydrogen production as of April 2026. The European Union allocated approximately 800 million euros for this purpose. Germany received the largest amount of funding, at about 132 million euros, followed by France with about 128 million euros.

Patent Applications Are Rising Significantly

International patent activity reflects the growing momentum in research. The analysis covered approximately 4,900 transnational patent applications related to electrolysis. Their number has increased particularly sharply since 2020. The United States and Japan lead in terms of the origin of the patents. Germany ranks third in all three technology categories, followed by China.

Sven Altvater, a research associate at Fraunhofer ISI, believes Germany is thus well-positioned in research and innovation. “The key now is to translate the funded development work into marketable technologies, industrial applications, and competitive companies,” he said.

Market forecasts vary widely

It has so far been difficult to estimate how quickly the electrolyzer market will develop. This is evident from an analysis of 55 market studies covering the years 2019 through 2026. The projected annual growth rates for the global market range from 5.6 to 97.7 percent. The median is 25.7 percent.

Revenue forecasts for 2030 also vary considerably. The studies project annual global revenues ranging from 651 million to 226 billion U.S. dollars. The median is 14 billion U.S. dollars. Key factors include the expansion of renewable energy, the regulatory framework, government subsidies, investments, and the ramp-up of the global hydrogen economy.

Municipal utilities plan 3,200 MW of capacity

Municipal utilities and regional energy providers are also expanding their involvement. While only about 4 percent of municipal utilities were involved in specific hydrogen projects at the beginning of 2023, the analysis at the end of 2025 already identified 64 electrolysis projects involving 57 municipal utilities and 17 regional energy providers. Together, these companies are planning approximately 3,200 MW of electrolysis capacity. However, many projects are still in the early stages of development.

Henning Döscher, who coordinates the research work in the “H2 Companion” project at Fraunhofer ISI, does not yet consider the transition to an economically viable mass market to be complete. He notes that this requires a reliable regulatory framework, predictable funding, and concrete buyers for green hydrogen.

The Fraunhofer ISI’s H2 market analyses are available online.

Author: Susanne Harmsen