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Nel targets $1.5/kg for green hydrogen

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Nel ASA hosted Nel Capital Markets Day 2021, setting out the goal of generating green hydrogen at $1.5 per kilo by 2025 to outcompete fossil alternatives.

Cost savings by increasing demand to a multi-GW scale, increasing the organization to incorporate resources and expertise, and investing in near-and long-term technologies are key components in ensuring that Nel continues to be the global leader in the hydrogen industry.

“Green renewable hydrogen is set to outcompete fossil alternatives, and Nel is placed in the centre of this transition. We’re today launching our target which should enable our customers in certain markets to produce green renewable hydrogen from a large-scale Nel facility at 1.5 USD/kg from low cost renewable power, already within 2025. Achieving this would allow green hydrogen to start to reach fossil parity, representing one of the most significant achievement for zero-emission solutions and a carbon neutral planet.”

Jon André Løkke, CEO of Nel.

Nel’s Capital Markets Day 2021 (CMD) details the vision and goals for 2025 to counter the current hydrogen demand of 70 million tons, which is projected to expand by 8 times by2050, primarily based on green hydrogen.

“The hydrogen market is already large, but with only a fraction served by electrolysis, there are significant opportunities to turn the existing market green. In addition, we see a regulatory landslide across the globe, with the EU and the US pledging hundreds of billions of dollars into their zero-emission programs where hydrogen serves a vital part as the energy carrier of choice. The growth will not only come from industrial applications, but also from transforming the current diesel-based heavy-duty transportation to run on zero-emission and cost-efficient green hydrogen. These developments require low-cost electrolysis and ultra-fast fueling, both areas where Nel is the global leader.”

Jon André Løkke, CEO of Nel.

Nel is expanding electrolysis production to satisfy large-scale projects by building a fully integrated manufacturing plant in Herøya, Norway. Test production of the first 500 MW production line will begin in the second quarter of 2021 with operational ramp-up in the third quarter of 2021. Centered on the protected facility at Herøya, Nel outlines the ability to increase production capacity at this facility above 2 GW per year.

“Herøya represents the first industrial-scale production of the most efficient electrolysers on the market, at a game-changing low cost. The Nel team is continuously working to drive down the cost of hydrogen, where scale-up is key, and will continue to assess the exact timing for the next expansion step. A 2 GW production capacity of electrolysers would represent a potential of four-to-five million tons of COreductions for our customers, or ten percent of the annual COemissions in Norway.

“Nel uniquely covers both PEM and alkaline technologies, each with their respective advantages, and we will continue give them our full support and equal priority. The technology roadmap highlights our priority on large-scale products, continuous improvements, and lowest total cost of ownership for our customers. The hydrogen industry will become increasingly competitive and Nel therefore needs to continue to invest in organization, technology, and equipment to remain in the forefront of the industry.”

Jon André Løkke, CEO of Nel.

Nel has delivered more than 110 hydrogen fueling stations (HRS), H2Stations, in 13 countries. The global demand for HRS is projected to grow by 30 percent annually by 2030, with 11,000 deployed fuel stations, in addition to solutions for fueling private trailer parks, trains, ferries, etc.

“The only way to transform heavy-duty transportation is to beat diesel at the pump. In addition to green hydrogen reaching fossil parity at production, we have to enable fast fueling of hydrogen in a reliable and cost-efficient manner to be able to beat fossil alternatives. Nel has a technology roadmap enabling fueling in 10-15 minutes of a heavy duty truck to achieve a range of 1,000 km, and we are in a good position to continue to lead the hydrogen fueling industry.”

Jon André Løkke, CEO of Nel.

Nel reiterates confidence in the industry’s long-term prospects, backed by the “green recovery” highlighted in numerous government initiatives. The business aims to build on the opportunities by exploiting its role as a technology leader, continuing to concentrate strongly on protection, global footprint, scalability, cost leadership, solid funding, and preferred partner status for market participants.

“Large opportunities also represent major challenges for Nel going forward, as maintaining a leadership position requires large investments, rapid expansion of the organization, and execution of large-scale projects across the globe in an increasingly competitive environment. In 2021 alone, we will add more than 100 new colleagues, deploy over 25% of the capital raised in 2020 in plant, equipment, and technology development projects, and add more capacity as required by the market. The Capital Markets Day will unveil how Nel will address these challenges, as an emission-free future depends on green hydrogen.”

Jon André Løkke, CEO of Nel.
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