Norwegian electrolyser manufacturer Nel has announced it will build a 4GW factory in Michigan, amid strong incentives from the US for equipment manufacturing and hydrogen project development. The factory will manufacture both proton-exchange-membrane (PEM) and alkaline electrolysers.

While FID has not yet been taken, Nel is expected to invest up to $400mn in the project and employ up to 500 workers at the factory at full scale.

“The choice of Michigan is based on an overall assessment of what the state can offer in terms of financial incentives, access to a highly skilled workforce and cooperation with universities, research institutions, and strategic partners,” says Nel CEO Hakon Volldal, adding that the firm had “personal engagement” with Michigan’s governor, Gretchen Whitmer.

“We secured an investment from Nel to continue building on our leadership in cars, chips, and clean energy” Whitmer, Michigan governor

“Earlier this year, I went on an economic mission to Europe to show the world what Michigan has to offer, and as a result of our efforts on the trip, we secured an investment from Nel to continue building on our leadership in cars, chips, and clean energy,” says Whitmer. “As a major player in all three of these sectors, Michigan is serious about leading hydrogen development, and winning today’s investment proves that the best manufacturing in the world happens right here in Michigan.”

Volldal also highlights that the factory will be in the same state as the headquarters of General Motor (GM), with plans for the two companies to collaborate on technology development. GM announced last year that it would expand applications for its Hydrotec fuel cells to cover power generation as well as transport.

“Having Nel’s new facility close to our home base of Hydrotec development, in southeastern Michigan, will help us more quickly accelerate our electrolyser collaboration,” says GM’s executive director of Hydrotec, Charlie Freese. “This technology is critical in helping bring down costs, while also creating a more sustainable hydrogen supply.”

Under the Inflation Reduction Act (IRA), electrolyser and fuel-cell manufacturing facilities are eligible for a 30pc investment tax credit. The IRA’s clean hydrogen production tax credit is also expected to drive FIDs on green hydrogen projects and therefore stimulate major electrolyser demand.

Nel announced earlier this year it had taken FID on expanding its PEM electrolyser factory in Wallingford, Texas to 500MW by 2025. The firm is also constructing a second production line at its Heroya alkaline electrolyser manufacturing facility in Norway, which will take the site’s capacity to 1GW.

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Author: Polly Martin