Norway’s Nel has taken FID on expanding its 50MW electrolyser manufacturing facility in Wallingford, Connecticut to 500MW by 2025. The expansion is estimated to cost NOK60mn ($25mn) and represents a push into the US, as Nel considers sites for a planned gigawatt-scale facility.

The gigafactory will produce both alkaline and proton-exchange-membrane (PEM) electrolysers, with around 4GW of total production capacity. “We are considering three attractive alternatives in three different states and will make a final decision shortly,” says Nel CEO Hakon Volldal.

The Wallingford facility produces PEM electrolysers, while Nel’s Heroya factory in Norway produces the alkaline variety. While the PEM versions are better quickly able to ramp production up and down in response to variable input compared with alkaline electrolysers, the use of platinum group metals in this type of equipment could represent a potential chokepoint for scaling up capacity.

500MW – Expanded production capacity at Wallingford

The manufacturer tells Hydrogen Economist that its largest customers are in the US. Australia’s Woodside—itself prioritising investment in the country—recently placed a 50MW electrolyser order with Nel for its H2OK project. And an undisclosed customer placed a 200MW alkaline electrolyser order in July, with production and delivery of stacks originally scheduled to take place at Heroya from this month through to 2024.

Nel recently announced a NOK780mn loss over 2022 compared with a loss of NOK475mn the previous year, despite revenue increasing by 25pc year-on-year and reaching a record high order backlog of nearly NOK2.3bn. The manufacturer attributes this to high losses in its fuelling segment, low margins on electrolyser projects signed in 2020–21 and “increased personnel expenses to prepare for large-scale projects”.

“Nel is dissatisfied with the profitability in its fuelling division and is considering and implementing operational and strategic actions to improve performance and profitability,” the manufacturer notes in its full year earnings report. The company will also narrow its scope on large electrolyser projects to stacks and balance-of-stacks while partnering with EPC firms.

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Author: Polly Martin