[ industry trends ] electrolyser technologies mature, because developments will need to be proven at an ever-larger scale to demonstrate long-term competitiveness and bankability.
Also, the cost of growth capital in this space will increase due to higher perceived risk and a more realistic expectation of returns. Interest rates being higher now than at the turn of the decade during the hype years of green hydrogen will also thin out the field.
Fewer, bigger electrolyser value chain players with strong backing are essential for the next phase of hydrogen electrolyser innovation. Only the premium players and the greatest ideas will prevail.
Convergence
Many of the more than 100 stack builders, electrolyser system OEMs, and systems integrators will begin to merge or acquire each other. This is nothing new for the sector. Plug Power acquired Giner for more than $ 60 million in 2020. Sunfire acquired alkaline electrolyser technology from IHT in 2021.
Others may collaborate to pool resources and share development budgets, as Industrie De Nora and thyssenkrupp Industrial Solutions have done since 2001. This partnership has continued through the 2022 IPO of thyssenkrupp nucera.
More and more players will fall by the wayside, just as AquaHydrex filed for bankruptcy and discontinued its alkaline electrolyser R & D efforts in October of 2023. After spending millions of dollars in investment equity, in the end, only a handful of dollars were offered for AquaHydrex’ s IP and R & D equipment.
Tigers ready to pounce
Nel acquired Proton Energy Systems in 2017 to form what was, at that time, the world’ s largest electrolyser producer. The acquisition also meant that both PEM and alkaline electrolysers were available from one provider.
Recently, the tide has turned. Nel has announced a halt in stack production at its recently modernised production facility in Herøya, Norway. The most recent capacity upgrade at that location came online in 2024. The site boasts an electrode plating line and highly automated production of its atmospheric pressure alkaline electrolyser stacks.
Furthermore, Cavendish( the hydrogen mobility specialist spin-off from Nel) has also recently required a capital injection from Nel. Their declared focus now is on cash preservation and maintaining a technological edge for when the market picks up. Well, that’ s if it does pick up and they are regarded as a serious competitor when it does.
On the other hand, the development of Nel’ s( yetto-be-launched) pressurised alkaline product range appears to continue unabated. Is this an admission that Nel’ s atmospheric alkaline product range, and the Herøya factory that was refurbished around it, was always an outdated product with a stillborn growth strategy?
Will Nel be the first big name to fall victim to a‘ buy and break’ PE play? Will their PEM, atmospheric alkaline, and new pressurised alkaline divisions be broken up? Will some product lines and production assets be wound down and others sold in different directions?
Is Nel ripe for a takeover by a competitor at a bargain price? Will Nel struggle on and ultimately lay itself at the mercy of the insolvency court?
Or will the green hydrogen market suddenly pick up and pull for all the available capacity? It seems unlikely. Like Cavendish, Nel seems to be following a similar strategy of cash preservation and innovation to maintain technological relevance.
Hydrogen Tech World | Issue 21 | April 2025 17