US electrolyser manufacturer Ohmium has raised $250mn in private equity financing, highlighting investors’ appetite for a sector that is undergoing rapid growth as the pipeline of green hydrogen projects swells.

Ohmium, which specialises in modular proton-exchange-membrane (PEM) electrolyser systems, will use the funds to support the expansion of its production capacity to 2GW/yr and to accelerate its R&D programmes.

“Ohmium is experiencing tremendous success in 2023. We are on track to deliver our PEM electrolyser systems to customers worldwide operating across multiple sectors,” says Arne Ballantine, CEO of Ohmium.

“This capital raise is a validation of Ohmium’s strategy and technology leadership and provides our organisation with the kind of investment needed to deliver on our ambitious plans for international growth.”

“We are on track to deliver our PEM electrolyser systems to customers worldwide operating across multiple sectors” Ballantine, Ohmium

Ohmium has announced a slew of orders over the last 18 months, including a recent deal to supply electrolysers for a green project at the Huelva LNG terminal in Spain. Other deals include a contract with private Indian renewables developer Amp Energy to supply 400MW of green hydrogen production capacity. It is also working with the Indian arm of Shell to evaluate project opportunities in the country, under a memorandum of understanding signed in 2022.

Ohmium’s funding round was led by Texas-based private equity group TPG, with participation by California-based technology investment fund Hanover Technology Investment Management and existing Ohmium investors.

“At a time when the market lacks sufficient reliable supply of electrolysers, we are pleased to lead the company’s latest funding round and partner with the team to scale its delivery capability,” says Ed Beckley, a partner at TPG.

Rapid growth

Ohmium’s planned expansion comes as electrolyser manufacturing enters a period of rapid growth, easing concerns over supply bottlenecks in the green hydrogen sector.

Global electrolyser manufacturing capacity is on track to reach 48GW/yr in 2025, which is 60pc higher than planned capacity six months ago, according to consultancy Aurora Energy Research.

The total cumulative capacity of planned manufacturing projects has almost doubled since October 2022, rising to 410GW by 2030, surpassing the capacity of electrolyser projects planned to be operational by 2030 by 38pc, Aurora says.

Capacity expansions underway in the sector include the construction of a second production line at Heroya in Norway by electrolyser manufacturer Nel, which will take the Norwegian company’s total capacity at the site to 1GW/yr. The expansion is progressing, according to plan, the company says in its first quarter earnings report.

“Nel is observing a constant increase in interest and potential opportunities within the hydrogen industry,” says Nel’s CEO, Hakon Volldal. “Our pipeline continues to improve and mature, and we continue to secure large-scale contracts. As a result, we shall keep on investing in the organisation, improving our technology platforms, and scaling manufacturing capacity.”

Nel’s order intake in the first quarter was up 105pc in value terms, compared with the same period in the previous year. The value of its order backlog at the end of the quarter was up 126pc from a year ago and up by 12pc on the previous quarter.

Nel is also expanding its capacity in the US. It plans to raise PEM production capacity at its Wallingford, Connecticut facility to around 500MW/yr through greater automation. Nel is planning to develop a second US manufacturing facility for alkaline and PEM systems. It says it will announce the location of the planned facility shortly.

The US is taking market share from Europe because of the generous tax credits offered under the Inflation Reduction Act (IRA), Aurora says.

“The decreases in Europe’s shares of electrolyser pipeline and manufacturing capacity are a direct consequence of the bloc’s slow response to the US IRA and delay in developing concrete regulation for renewable hydrogen,” says Dilara Caglayan, hydrogen research lead at Aurora.

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Author: Stuart Penson