90-Year-Old Electrolyzer Company to Expand Manufacturing Tenfold: This Is the Hydrogen Economy

A seasoned hydrogen player has announced plans to expand its manufacturing plant capacity tenfold. This is just the latest signal that the hydrogen economy is ramping up. Nel Hydrogen, one of the longest-standing electrolyzer manufacturers, made the announcement in August about its plant in Norway.

Trucking Beer on the Hydrogen Highway

The scaling of the hydrogen economy has always suffered from a chicken/egg problem, with a lack of infrastructure (such as fueling stations) inhibiting widespread fuel cell vehicle deployment and vice versa. But a recent announcement by Nikola Motor Company is a major leap forward: the company is using as much as 1 GW of Nel electrolyzers to roll out a fuel station network in the US, with drink maker Anheuser Busch as a key starting anchor client. The brewing company placed an order for up to 800 of Nikola’s hydrogen fuel cell trucks, some of which claim a 1,000+ mile range. Nikola, for its part, has also announced a major new plant of its own, along with nearly $11 billion in pre-orders for its trucks.

Scaling the Hydrogen Economy, One Huge Leap at a Time

Big deals like this are important for scaling the industry, giving producers like Nikola and Nel the ability to target consistent production for years on end, and justifying the scaling of Nel’s plant from about 40 MW to 360 MW per year. The new capacity is larger than the annual production for all electrolyzer companies in 2017, and indeed, the company claims the new facility can lower costs by about 40%. Nikola expects to offer hydrogen to non-Nikola vehicles for $3.50/kg, which is significantly below the current cost at most hydrogen stations. (Using the example of California’s early commercial stations, prices have been in the $10/kg+ range.) The company has not shared how it will reach these low costs, but with major economies of scale driving down hardware costs and cheap electricity feedstock, Guidehouse Insights’ modeling shows that it is feasible. Costs in the $3.50/kg range compete readily with fossil fuels on a cost-per-mile basis, to say nothing about the emissions advantages. This in turn would open potential for further growth in fuel cell EVs.