Nel has secured a €135m ($146m) EU Innovation Fund grant to revive and industrialise its pressurised alkaline hydrogen electrolyser technology, after its first-generation system was pulled from the market.
Promised to be a “fundamental redesign” of its previous pressurised alkaline system, Nel says the next generation will have higher efficiency to reduce OPEX and shorter response times for pairing with renewables.
Having tested full-size electrodes during the first half of 2024, Nel in July said it would start construction of a 6.25MW prototype system in Herøya, Norway.
With the Innovation Fund grant, the Norwegian original equipment manufacturer (OEM) plans to phase a build-out of the technology’s production.
Initially expected to boast 1-2GW of annual manufacturing capacity at its Herøya gigafactory, the firm has said the support will be phased alongside its own investments up to 4GW of capacity for the next-gen system.
However, a final investment decision (FID) to start building capacity will depend on achieving successful testing with the current prototype, a planned pilot project, and “market acceptance of the new technology.”
It comes after Nel pulled its original pressurised alkaline product line in early 2023 after it blamed market trends and customer preferences shifting towards atmospheric alkaline and PEM technologies.
Atmospheric alkaline electrolysers function at ambient pressure, making them simpler and less expensive to build and operate. However, they typically produce hydrogen at lower rates and with lower energy efficiency.
Pressurised alkaline electrolysers, on the other hand, operate at higher pressures, resulting in faster hydrogen production and better efficiency. They are better suited for industrial-scale operations but are more complex and costlier to manufacture.
Nel’s first-generation pressurised alkaline system was also considered less competitive and scalable – something the firm’s President CEO, Håkon Volldal, thinks has been overcome.
“This grant will make it significantly easier for us to bring our new innovative pressurised alkaline technology to market,” he said.
Volldal did accept, however, that bringing a new technology to market, “always entails risk,” but added, “With this substantially larger grant from the EU Innovation Fund, we will be able to bring the innovation to market at an accelerated pace.”
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