Norway's Nel Q1 hydrogen electrolyzer sales hit by pandemic

London — Norwegian hydrogen electrolyzer producer Nel suffered a loss its first-quarter sales as the coronavirus pandemic slowed business and delayed the closing of orders, the company said May 4.

Nel Hydrogen Electrolyser saw revenue fall 9% year on year in the first quarter of 2021 to NOK64.5 million ($7.76 million), with alkaline electrolyzer sales in Norway down 63%, though the fall was offset by increased proton exchange membrane sales in the US, which rose 26%, Nel said in its first-quarter results statement.

However, the company was upbeat on the market outlook.

"Despite the effects of COVID-19 on business activity, Nel continues to look to the future with enthusiasm and clarity of purpose," it said in the statement.

"Global adoption of hydrogen-related technologies and infrastructure have grown significantly in recent years, and hydrogen generally is finding broad support in government and industrial initiatives," it said. "The capital markets, our customers and other industry stakeholders have also continued to demonstrate support for the growth and investment strategy that has been Nel's focus in the past several years. We remain committed to this strategy for the foreseeable future."

Nel is building a new electrolysis manufacturing plant at Heroya, Norway. Test production of a first 500 MW production line is to start in Q2 2021, with commercial ramp-up in Q3.

"The Heroya expansion project is progressing according to plan," CEO Jon Andre Lokke said in a statement.

Ultimately it aims to boost production capacity at Heroya to 2 GW/year.

Nel is targeting a 40% reduction in electrolysis capital costs to below $500/kW based on production capacity of 500 MW/year, with further reductions down to $300/kW as capacity grows to 2 GW/year, the company said in January.

It aims to produce renewable hydrogen at $1.5/kg by 2025 in markets where renewable energy costs are around $20/MWh, outcompeting fossil fuel-derived alternatives.

S&P Global Platts assessed the cost of producing green hydrogen (Netherlands, PEM electrolysis including capex) at Eur4.54/kg April 30. For alkaline electrolysis the comparable assessment was Eur3.55/kg.

Hydrogen refueling

Nel's hydrogen refueling segment reported a 66% growth in first-quarter income to NOK92.4 million.

"Nel Hydrogen Fueling has seen a large increase in the utilisation of many of the stations installed, enabling accelerated learnings and improvements both within product maturity and overall reliability," it said.

"Fueling a hydrogen car needs to be as easy and reliable as fueling a gasoline or diesel vehicle. A hydrogen fueling station is a complex and relatively new technology and the hydrogen industry, including Nel, still works with maturing the technology as well as investing in service and maintenance, robustness and reliability."

Solar partnership

Nel has entered a collaboration with solar panel producer First Solar to develop integrated photovoltaic hydrogen power plants, Nel said in a separate statement May 3.

"We will leverage our capabilities to extend our common product offering the end customer with a target to be able to deliver the lowest total cost of solar to hydrogen," Nel's Andre Lokke said.

The two companies will first develop an integrated power plant control and data system to optimize PV-electrolyzer hybrid projects, lowering the total cost of hydrogen and electricity, Nel said.

"As solar energy becomes mainstream, this is an excellent example of how we will power the new alternatives," First Solar CEO Mark Widmar said.