Q&A: Electric Hydrogen plans wider European presence

US electrolyser manufacturer Electric Hydrogen aims to strengthen its presence in the EU as its products attract growing interest from European buyers. Argus spoke with global commercial senior vice-president Jason Mortimer about the firm's expansion plans, the advantages of standardisation and the focus on proton exchange membrane (PEM) technology. Edited highlights follow:

How do you view the current state of the hydrogen market?

We are seeing an uptick in project certainty and maturity across Europe, driven largely by the transposition of the revised renewable energy directive (RED III) becoming a reality. Green hydrogen is still too expensive and there is also an infrastructure challenge, but the situation is not dissimilar to what we saw with solar and wind power 15 years ago. In the short term, the focus is on replacing fossil hydrogen, particularly in refineries. In the medium term, it is about producing chemicals with a lower carbon footprint, specifically methanol and ammonia. In the long term, hydrogen becomes an industrial gas that is transported through pipelines.

How does Electric Hydrogen's product compare with European offerings?

We are addressing the capital cost side of the equation, which is where standardisation, modularisation and manufacturing can make a difference. We introduced a standardised 100MW electrolyser plant to the market. One of the major challenges facing green hydrogen projects in Europe has been very high site costs. While the equipment itself is expensive, what has really driven project costs above €2,500/kW is site-specific engineering and integration work, which is typically carried out by EPC contractors. We have taken a different approach. We have moved much of that work into the factory and only bring the equipment to site when it is ready for final assembly. That reduces installed costs by more than half.

Are there plans to set up manufacturing in Europe?

We have plans to manufacture plants in Europe and will have more to say about that in the future. Around 70pc of our product can already be manufactured in Europe through our European partners. There is a growing focus on European-made products, and we believe we can localise production further. We will continue to manufacture the stacks in the US.

Are there plans to explore technologies beyond PEM?

We believe PEM is a strong solution, particularly for renewables, because it can respond to fluctuations in wind and solar generation more effectively than alkaline technology. More importantly, we think there is still significant room for cost reductions. We have already cut costs by half, and we need to halve them again to reach parity with fossil-based hydrogen. As we produce more units, we will benefit from economies of scale and the virtuous cycle that comes with manufacturing experience and learning. There are also further design improvements we can make to reduce the size and complexity of the system.

Shifting to North America, what is your current assessment of the US market?

The US market still exists, largely because there remains an opportunity to benefit from a very attractive tax credit. We have projects in the US that are expected to reach final investment decisions this year. That said, it is unlikely the market will achieve the scale originally envisioned. The US market currently relies on incentives, but there is no regulatory requirement driving demand. Projects will move forward in the US, but many of them will be exporting to Europe.