Electrolyser manufacturer Nel has taken FID on a second production line at its Heroya facility, CEO Hakon Volldal said on the firm’s second-quarter results call.

The facility’s capacity will double from 500MW/yr to 1GW/yr by April 2024. Nel has already begun ordering some items that required for the facility’s construction, which will cost €35mn ($36mn)

“It is not cheap, but it is not expensive either,” Volldall says. “The Heroya expansion supports what we have previously communicated: when demand is present, we will add capacity.”

At the end of the second quarter, Nel reported its highest ever order backlog, of NOK1.4bn ($150mn), up by 33pc from the same quarter last year. The company has also subsequently announced a record order for a 200MW alkaline electrolyser from an undisclosed US firm.

The Heroya facility was opened in April this year. Nel had been considering sites for a second facility elsewhere in Europe but ultimately decided to expand Heroya. The facility could potentially expand again with two more lines, to 2GW, if the company sees adequate demand.

2GW/yr – Potential full capacity of Heroya facility

The firm is still looking for sites for a manufacturing facility in both the US and in Asia.

“It takes a little bit of time to find the ideal location from a logistics, grants and competence point of view,” says Volldall.

All signs point to orders growing, particularly with new governments in the US and Australia looking to greatly expand their nations’ hydrogen production capacity, Volldall adds.

“The US could become cheapest place to produce hydrogen as a result of the production tax credit and so it will become an increasingly important market for Nel,” he says.

Falling operational expenditure costs, a greater understanding of project financing by financiers and a favourable policy landscape are all factors in the acceleration of larger projects, according to the firm’s results statement.

The results call was the first in his role as CEO after the departure of Jon Andre Lokke.

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Author: Tom Young