<article><p class="lead">Norwegian electrolyser manufacturer Nel said its order backlog rose to 1,289mn Norwegian kroner ($131mn) at the end of the first quarter of 2022, its highest yet and up by 19pc on the year.</p><p>But chief financial officer Kjell Christian Bjornsen said this is not enough "to run the plant [at Heroya] 24/7 for the next two years yet… this is the binary situation of this industry, we are not sold out but we are talking to customers about capacity reservation fees."</p><p>Nel's Heroya alkaline electrolyser manufacturing plant has a capacity of 500MW/yr, is fully automated and has space to scale up to 2GW/yr, chief executive Jon Andre Lokke said. Nel said this is the biggest in the world, although analysts noted other companies have made the same claim. </p><p>"There are many claims in this industry unfortunately… companies have announced expansions, these are very often empty buildings." Lokke said.</p><p>Nel said it is on track to reach its ambition to reduce green hydrogen production costs to $1.50/kg by 2025, and to reduce capital expenditure (capex) costs by 75pc. Automation and scaling up will account for half of these cost reductions, Lokke said. </p><p>Nel is targeting 10GW/yr of production capacity by 2025, with 4GW/yr in Europe, 4GW/yr in US and 2GW/yr in Asia-Pacific, split between polymer electrolyte membrane (PEM) and alkaline electrolysers. </p><p>Lokke said that Nel's alkaline electrolysers use no rare earth materials, something he said is unique to the firm and that will become increasingly important. </p><p>"Most of our competitors are struggling using materials that will limit their ability to grow," he said.</p><p>Earlier this month, the European electrolyser industry signed a joint declaration with the European Commission on support for scaling up, with further details expected to be released next week. Lokke welcomed the declaration, saying Europe will give capex and operating expenditure support to European electrolyser manufacturers, and that it will also exclusively support European manufacturers. </p><p>"Europe does not want to make the same mistake it made with solar," Lokke said, referencing the dominance of Chinese suppliers in the solar panel market. Although Norway is outside the EU, Nel is considered a European firm in this context, Lokke said. </p><p>Nel made a profit of 84 million kroner ($8.5mn) in the first quarter of 2022, compared with a loss of Nkr578mn in the same period a year earlier.</p><p class="bylines">By Killian Staines</p></article>
