London — Norwegian electrolysis company NEL aims to produce renewable hydrogen at $1.5/kg by 2025, outcompeting fossil fuel-derived alternatives, it said Jan. 21.
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Scaling up electrolysis to multi-GW size is seen as important in reducing capital costs, but the input cost of renewable electricity is the single biggest factor in the cost of green hydrogen.
As such, NEL recognized the target was achievable in particular markets.
"We're today launching our target which should enable our customers in certain markets to produce green renewable hydrogen from a large-scale Nel facility at $1.5/kg from low cost renewable power, already within 2025," it said.
Achieving this would allow green hydrogen to start to reach parity with conventional hydrogen production from fossil fuels, said Nel CEO Jon Andre Lokke ahead of a capital markets day event.
The current global hydrogen market of 70 million tons is expected to grow eight times by 2050, according to the Hydrogen Council.
"The hydrogen market is already large, but with only a fraction served by electrolysis, there are significant opportunities to turn the existing market green," Lokke said.
"We see a regulatory landslide across the globe, with the EU and the US pledging hundreds of billions of dollars into their zero-emission programs where hydrogen serves a vital part as the energy carrier of choice," he said.
The growth would come from industrial applications, transforming diesel-based heavy-duty transportation.
"These developments require low-cost electrolysis and ultra-fast fueling," he said.
Nel is building a new electrolysis manufacturing plant at Heroya, Norway. Test production of the first 500 MW production line is to start in the second quarter this year with commercial ramp-up in the third quarter. Ultimately it aims to boost production capacity at Heroya to 2 GW/year.
"A 2 GW production capacity would represent a potential of four-to-five million tons of CO2 reductions for our customers, or ten percent of the annual CO2 emissions in Norway," Lokke said.
Nel produces both PEM and alkaline electrolysers, "each with their respective advantages, and we will continue give them our full support and equal priority," he said.
Nel has supplied over 110 hydrogen refueling stations in 13 different countries. The global HRS market is expected to grow by 30% annually to 2030, with 11,000 installed fueling stations.
"The only way to transform heavy-duty transportation is to beat diesel at the pump. Nel has a technology roadmap enabling fueling in 10-15 minutes of a heavy duty truck to achieve a range of 1,000 km," Lokke said.