French electrolyser and hydrogen filling station manufacturer Mcphy has delayed FID on a proposed electrolyser gigafactory at Belfort in northeastern France until mid-2022 as its seeks financial support under the EU’s Important Projects of Common European Interest (IPCEI) scheme.

Mcphy had previously targeted the end of 2021 for FID on the plant, but the project “remains conditional on obtaining financing under the IPCEI”, the company says in its 2021 earnings report.

The initial timeline was for production to start in the first half of 2024 with a gradual ramp-up to 1GW/yr, taking Mcphy’s total capacity to 1.3GW/yr.

The Belfort project, expected to cost €30-40mn ($34-45mn) is one of the first of its scale to emerge in France since the government launched its national hydrogen strategy and one of 15 projects submitted by the French government to the European Commission as part of the scheme.

Meanwhile, French proton-exchange-membrane (PEM) electrolyser manufacturer Elogen has also submitted a gigafactory proposal for IPCEI funding—although it says it will still move ahead with its factory by 2025 at a smaller capacity even if it does not receive the cash.

The IPCEI scheme grants hydrogen-related projects capex funding. Projects with IPCEI status also avoid any potential conflict with EU state aid rules.

Growing demand

Mcphy, which specialises in high-pressure alkaline electrolysers, increased its order backlog by 30pc in 2021 compared with the previous year, but its operating losses widened despite rebounding sales in the second half of the year.

€25mn – Expected operating loss for Mcphy in 2021

The order backlog at the end of 2021 stood at €20mn. The total number of contracts which the company has been awarded, or for which it has been identified as a preferred partner, cover 191MW of electrolyser capacity, up from 40MW in 2020 and 13MW in 2019.

Revenues for 2021 were €13.1mn, down by 4.4pc, with the operating loss expected to widen to €25mn, from €9mn in 2020.

“The expected growth for 2021 was slowed down in the first half of the year, partly due to the global health context and related restrictions, and to the wait-and-see attitude of certain stakeholders dependent on public funding mechanisms,” the company says.

The widening operating loss was due in part to costs of nearly €5mn related to a potassium hydroxide leak in June on an electrolyser installed by the company in Germany. The cost included the replacement of stacks at several other plants using a similar electrolyser model.

Alternative investment strategy

Meanwhile, Elogen is also seeing a growing order book and will complete construction this year on a new factory outside Paris that will enable it to produce 160MW/yr of PEM stacks—the largest production capacity in France.

The factory has received finance from the French government’s industrial revival plan.

Were it to receive IPCEI funding for its gigafactory, Elogen says the two facilities and its existing operations would give it the capability to manufacture 1GW/yr by 2030.

Without the funding, Elogen aims to reach 400MW/yr of manufacturing capacity by 2030.

“While continuing to strengthen its teams both in terms of R&D and business development and execution, Elogen will continue its development and transformation in 2022,” says Jean Baptiste Choimet, the firm’s managing director.

Acquisition mission

Elogen was acquired in 2020 by engineering firm GTT group, which has since invested nearly €15mn in the firm, which was called H2gen before the acquisition.

“Elogen is entering a new phase of its development with a first industrial ramp-up, with the ambition of developing ever more efficient and high-performance PEM electrolysers,” says GTT CEO Philippe Berterottiere.

“Elogen’s strong R&D, combined with that of the GTT Group, aims to develop a differentiating French technology and to reduce the cost of producing carbon-free hydrogen.”

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Authors: Stuart Penson, Tom Young