Norway's Nel, a pure-play hydrogen technology company, is on track to start up a new automated electrolyser production line at its Heroya plant in Q3, enabling larger projects to reduce green hydrogen production costs.

The new line is expected to have a 500MW annual capacity of alkaline electrolysers, up from 40MW and with potential to raise output further to 2GW.

“The new, fully automated 500MW production line will be a game changer for Nel and for the industry once it is producing and we will start the ramp-up in the third quarter of this year, significantly reducing the costs of producing green hydrogen,” says Andre Lokke, Nel’s Chief Executive Officer.

500MW – Expanded annual capacity at Heroya plant

Earlier this year, Nel set a target for achieving green hydrogen production costs of $1.5/kg by 2025, based on an assumed power price of $20/MWh and cost of capital above 8pc.

The size of power-to-X projects is undergoing a step-change in scale worldwide, Nel says in its Q2 earnings report. Revenue and operating income in Q2 was NOK163.7mn ($148.6mn), following year-on-year growth in its fueling and electrolyser segments by 9.8pc and 10.6pc respectively.

The company’s pipeline of orders was up 4pc year-on-year but down 7pc from Q1, with Covid-19 travel restrictions weighing on order intake. Operating expenses in the second quarter rose by 41.8pc year-on-year, with raw material expenses up 37.7pc.

“Revenues and operations have been and are expected to continue to be negatively impacted by disruptions in the value chain, travel restrictions and general business slowdown caused by Covid-19,” the company says.

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Author: Stuart Penson