JOHANNESBURG (miningweekly.com) – Electrolytic hydrogen enables long-term energy storage way beyond what batteries can provide, which is exemplified by a 200 MW hydrogen plant in the United States having larger storage capacity than all the batteries currently linked to the electricity grid in the United States, including the batteries from Tesla.

“That’s the big thing about hydrogen,” Nel ASA president and CEO Håkon Volldal emphasised during question time, following the Norway-based company’s presentation of first-quarter results in Oslo on Wednesday, April 22.

“We need to take a fresh look at our energy system and a stronger focus needs to be placed on renewable hydrogen, which can be produced locally and close to end‑users,” said Volldal after reporting a second purchase order by Mesure Process of the United States for containerised proton exchange membrane (PEM) electrolyser equipment for use in Europe. PEM electrolysers make use of platinum and iridium, platinum group metals (PGMs) that South Africa hosts in abundance.

“The momentum for containerised PEM solutions is picking up. The good thing about that solution is that we have a fairly short delivery time on containerised PEM solutions.

“We can deliver systems in less than 12 months. The order we booked in April will be delivered in 2027. If we get orders now until the year end, I think we have an opportunity to deliver all of those, or close to all of those, in 2027, so we’re hopeful that we can book more containerised PEM solutions,” Volldal enthused.

The goal for the next-generation PEM solution, now at a fairly advanced stage of development, is to slash the stack cost by a whopping 70%.

Mining Weekly: When do you expect to launch next-generation PEM?

Volldal: If I could give you an exact date, I would, but if there's one thing we've learned it is that technology development is uncertain, it takes time. There are always tricky things that you need to overcome that could be pertaining to the concept design itself, could be pertaining to availability of materials, or you end up with a cost that you don't like, so you have to re-engineer it. With PEM, we have the ambition to build a full prototype stack this year. Then that has to be tested, and then we need to spend some time to get partners to help us industrialise it. So, it will take a couple of years - whether that means we can launch it in mid-2028 or late 2028 or in 2029, I'm not able to say at the moment.

The benefit of the new PEM platform is that our goal is to take the cost down by 70% on the stack level, and in a PEM system, the stack is the most expensive component. That means we can significantly reduce capital expenditure (capex). It will be a low capex, low opex solution, so that's the Holy Grail. You get the cake and you can eat it. It's comparable with pressurised alkaline. It might have even better energy efficiency, and it could have a smaller footprint at a lower cost. The response is, as always with PEM, fantastic. So, it's more dynamic than pressurised alkaline, even though, I have to say, for larger pressurised alkaline systems, you also have fantastic dynamic capabilities. But we believe that this is something that will be even more competitive than the new alkaline product that we will launch on May 6, and that's why we continue to work on it.

Should I read PEM equals PGM?

Yes, but the iridium loading and the platinum loading is very limited. We will utilise much less iridium and platinum. The use of these will be at a very different level compared with what we see today.

IDEAL FOR CONTAINERISED PEM

In addition to the promising smaller projects that are ideal for a containerised PEM, larger projects in the 50 MW to 150 MW range are also emerging and these are expected to take on final-investment-decision status over the next quarters.

“The reason why containerised PEM has strong momentum is that projects have become smaller than we saw a couple of years ago.

“Then, customers spoke about 100 MW, 200 MW, 300 MW, 400 MW. Now, they plan for something smaller, at least initially. They want a gradual approach, where they build out capacity over time, when offtake materialises.

“If they start with the first step, that's usually in the 10 MW to 50 MW range, and that fits nicely with the containerised PEM systems.

“Multiple containerised PEM systems offer a proven, efficient and standardised alternative to customised and tailored solutions. We’ve achieved significant capex reductions over the past few years, both on the stack itself and on the system designed. Combined with a growing list of references that we have around the world, this has increased Nel’s competitiveness in this market segment," Volldal pointed out.

Europe is currently the most active and promising region, but Nel also has projects and deliveries in North America and interesting prospects in the Middle East and Asia, it was reported during the company’s presentation of results, where hydrogen was hailed as being “at another level” when it comes to the colossal energy storage that it enables.

Providing an example of how hydrogen can help to flatten out the demand curve for electricity, attention was drawn to a 20 MW plant in Denmark.

“This plant is run when there is excess energy in the system. So, instead of them bringing prices down to a very low level, this helps prices stay more or less stable, because they can also shut down the equipment when demand for electrons is high,” Volldal explained during the presentation covered by Mining Weekly.

The 20 MW facility helps to balance out the peaks and troughs of electricity demand, with implementation on a larger scale helping to avoid periods where operators and generators get absolutely zero revenue for the electricity they produce, amid also helping consumers to avoid periods when demand is high and electricity prices go through the roof. It basically helps to flatten out the price curve for electricity.

With a century of experience, Nel has sold more than 7 000 hydrogen-generating electrolysers globally, and has many technology platforms spanning PEM and alkaline.

“We have proven solutions for today, but we need new solutions for tomorrow. We need solutions that can bring the total cost of hydrogen down, and we don't develop that only here in Nel.

“We do it through a big network of world-class partners. We make big leaps in terms of innovation and how we look at cost-down opportunities, and they combine that with market-leading production capabilities,” Volldal outlined.

HYDROGEN’S LONG-TERM STORAGE POTENTIAL

Mining Weekly: For how long can the hydrogen be stored and when it is released, do fuel cells then turn it back into electricity that is green, clean and emission-free?

Volldal: There are different ways of storing hydrogen. You can store it in a buffer tank for large quantities of energy to be stored. You can even use a pipeline, or you can use salt caverns. There are salt caverns used in Sweden for storage. There are pipelines being used with compressed hydrogen, you can liquefy it and store it in a tank. So there are different ways of storing the energy, and if you want to turn it back into electricity, you have to run the hydrogen through a fuel cell again to generate that electricity, which you can use on site, or send it back to the grid.

Electricity can't be stored for that long but you’re pointing out that hydrogen can?

That's the big thing about hydrogen. You turn it into a molecule that you can store for a very long period of time, we’re talking years, if necessary. There is always a little bit of a loss, what we call a boil off, but that's a Mickey Mouse figure compared with the total amount of energy that you store. So, whereas batteries can help you smooth out short-term swings, it's very difficult with batteries to store large amounts of energy and use that, let’s say, when you need more energy during the winter. But it's difficult to store that in the summer and release it in the winter. With hydrogen, you can do that, even over multiple years. So, that's where batteries and hydrogen serve different purposes but I think both are needed to have an energy system that we can depend on.

Can you use the existing storage infrastructure, existing tanks, or do you have to build special new infrastructure in which to store the hydrogen?

In some places you have infrastructure in place that you can leverage.

DEFENCE SECTOR

Asked about the supply by Nel to the defence sector, Volldal spoke of Nel having a number of defence-linked collaborations while Nel CFO Kjell Christian Bjørnsen reported that for years, grants from the Department of Defense in the US had been received to work on hydrogen as part of an energy resilience programme.

ORDER OUTLOOK

On the outlook for order intake currently, Nel reported that it has good reason to believe that it would see order intake this year that would assure meaningful activity levels in 2027.

Regarding cash balance, personnel expenses have been lowered and external spending curbed, "and I do believe that we can stretch that cash balance fairly long, if it takes even longer to get orders. We're not stressed with the size of our cash balance," Volldal reported.

On the momentum for containerised PEM solutions picking up, a favourable factor is the relatively short delivery time for these nigh off-the-shelf type PEM solutions that can be provided in less than 12 months. The Mesure Process order just booked will be delivered in 2027. "If we get orders now until the year-end, I think we have an opportunity to deliver all of those, or close to all of those, in 2027, so we're hopeful that we can book more containerised PEM solutions,” Volldal commented.

At the time of going to press, yet another order for PEM electrolyser equipment was received, this time from Douglas County Public Utility District (DCPUD), a publicly regulated utility company that was instrumental in developing state legislation allowing utilities to produce and sell renewable hydrogen.

Instead of frequently ramping up and down the generators at the utilities hydroelectric project, the electrolyser can utilise excess power to help balance the grid. This reduces the need for mechanical adjustments, lowering wear and maintenance on the turbine units and associated equipment. The hydrogen produced can also be used for other high‑value applications.

“We’re excited to work with a visionary customer like DCPUD, as this will be the first green hydrogen plant we've sold that will be owned and operated by a public utility,” Nel chief commercial officer Todd Cartwright stated in the release to Mining Weekly. “The flexible operation of our PEM electrolysers is enabling the district to balance load with demand, in addition to producing a high value fuel,” Cartwright added.

"Our partnership with Nel Hydrogen will enable us to bring renewable hydrogen to our community," DCPUD GM Gary Ivory reported. "This will benefit our Wells Hydroelectric Project and advance hydrogen adoption in our region."

This is yet another purchase order for containerised PEM equipment, where the stacks will be produced at Nel’s manufacturing facility in Wallingford, Connecticut. The PEM electrolysers will be operational in the first half of 2027.

ENERGY RESILIENCE

Renewable energy can reduce exposure to certain price spikes and definitely help mitigate geopolitical dependency and investing in renewable energy and green hydrogen is cheaper than short-term subsidy programmes for fossil energy, while also, very importantly, reducing harmful carbon emissions. Hydrogen should thus be the overwhelming part of debates about energy resilience and security of supply.