Michigan to Become the Hub of Green Hydrogen Production Thanks to Nel ASA

Nel ASA Secures USD 29 Million Tax Credit for Michigan Manufacturing Expansion

Supporting Green Hydrogen Development in the U.S.

Nel ASA, a global leader in renewable energy technology and a pioneer in hydrogen production, has received up to USD 29 million in investment tax credits for its planned manufacturing expansion in Michigan. This tax credit, part of the Qualifying Advanced Energy Project Tax Credit (48C) program, comes as a federal initiative funded by the Inflation Reduction Act. The 48C program is jointly managed by the U.S. Department of Energy, the U.S. Treasury, and the IRS, aiming to incentivize clean energy investments.

The tax credit will cover 30% of the value of qualifying investments for Nel’s proposed facility, underlining the U.S. government’s commitment to expanding domestic manufacturing for green energy technologies. However, this support is conditional upon meeting specific wage and apprenticeship requirements.

Kathy Ayers, Vice President of Research and Development at Nel, expressed gratitude for this backing, emphasizing the company’s longstanding collaboration with federal programs to commercialize innovative technologies. Nel’s accumulated support from Michigan and federal agencies now totals nearly USD 200 million, though the final investment decision hinges on demand projections and further market assessments.

Technological Advancements Driving Green Hydrogen Innovation

Nel ASA’s recent progress in electrolyzer technology signifies a leap forward in green hydrogen production. Their focus on developing next-generation pressurized alkaline and Proton Exchange Membrane (PEM) electrolyzers aims to enhance cost efficiency and performance reliability.

• Pressurized Alkaline Technology

Currently in the prototype stage, Nel’s next-generation pressurized alkaline electrolyzers promise a dramatic reduction in production costs while delivering high energy efficiency. The company describes this development as a “step-change” in industry standards, potentially positioning the technology as a preferred solution for scaling up green hydrogen production.

• PEM Electrolyzers

Nel has also achieved significant milestones in PEM technology, working in collaboration with global partners such as General Motors. These systems allow for flexible and scalable hydrogen production, making them well-suited for various applications, including industrial use and renewable energy storage.

The recently awarded EUR 135 million grant from the EU Innovation Fund will accelerate the industrialization of Nel’s pressurized alkaline technology at its Herøya, Norway facility. The production capacity at Herøya is planned to scale up to 4 GW, contingent on successful prototype testing and market acceptance, with pilot manufacturing stages already underway.

Strengthening Global Presence Through Strategic Moves

The Michigan expansion aligns with Nel ASA’s strategy to broaden its global manufacturing footprint for clean hydrogen technology. This endeavor complements Nel’s existing facilities, including its automated electrode plant in Norway and its PEM manufacturing site in Connecticut. The move to Detroit also positions Nel to better serve North American demand for hydrogen solutions.

Strategic partnerships are another pillar of Nel’s growth. For example, a recent technology licensing agreement with Reliance Industries in India provides Nel access to emerging markets while addressing global demand for high-quality electrolyzers. These collaborative efforts reflect Nel’s ambition to consolidate its position as a key player in the global hydrogen economy.

Importance of Hydrogen Technology and Timelines

The construction of the proposed manufacturing plant in Michigan, along with the scaled-up production in Norway, could significantly influence timelines for widespread adoption of green hydrogen technologies. If Nel achieves successful market testing, we could see these advanced electrolyzers entering global markets within the next two to three years.

In Other Hydrogen News Headlines: Nel ASA Adjusts Capacity Amid Market Slowdown

Nel ASA has announced a temporary halt to production at its Alkaline facility in Herøya, Norway, alongside workforce reductions impacting about 20% of employees. This move addresses a slower-than-expected market for renewable hydrogen, missed order intake goals for 2023-2024, and project delays or cancellations.

“While the long-term outlook for clean hydrogen remains strong, we must make tough decisions based on lower order intake in 2024,” said Håkon Volldal, Nel’s President and CEO. CFO Kjell Christian Bjørnsen underscored the company’s strong financial position, emphasizing their focus on investing in technology and pursuing sales opportunities.

Nel remains engaged in clean hydrogen projects, prioritizing paid FEED studies and containerized PEM systems, signaling their commitment to innovation despite near-term challenges.

Real-World Applications and Future Outlook

The practical applications of green hydrogen technology are expansive. Today, electrolyzers are solving energy storage challenges, enabling excess renewable energy to be stored as hydrogen. This stored energy can then be used on-demand, offering a reliable solution for grid stability. Industries like steelmaking, which depend on high temperatures and abundant energy, can utilize green hydrogen to replace fossil fuels, significantly cutting emissions.

Looking ahead, Nel ASA’s investments and technological advancements underline the growing feasibility of hydrogen becoming an integral part of the global energy mix. If commercialized on a large scale, we could witness affordable green hydrogen revolutionizing power generation, mobility, and industrial processes by the end of this decade.