US green hydrogen developer cancels massive 1GW-plus electrolyser deal with Nel
Norwegian electrolyser manufacturer Nel has lost out on a massive order for its alkaline models, after a hydrogen start-up that claims to be building the largest off-grid H2 project in the US abruptly cancelled a preliminary supply deal with the firm.
The capacity reservation agreement, signed in April this year, would have seen Nel supply over 1GW of alkaline electrolysers for Hy Stor’s Mississippi Clean Hydrogen Hub (MCHH), which is now facing delays.
In a filing to Norway’s stock exchange yesterday (Monday), Nel reported that its order backlog is unaffected by the cancellation, as the capacity reservation agreement with Hy Stor was never counted as a firm order in its accounting.
The Norwegian company will keep the non-refundable capacity reservation fee from the deal.
The cancellation raises questions about the status of Hy Stor’s MCHH programme, which missed out on funding from the US government's $7bn Regional Clean Hydrogen Hubs scheme, despite bidding for $1.2bn in financial support.
Hystor had said that it is moving ahead with the project anyway and in December signed a front-end engineering design contract (FEED) for the project with Nel.
“Of course we would have liked the project to move on," Nel's CEO Håkon Volldal told Hydrogen Insight on the sidelines of World Hydrogen Week in Copenhagen today. “It might still move on, but it’s delayed, and since it’s delayed, it doesn’t make sense to have a capacity reservation agreement in the short term.”
Volldal acknowledged that uncertainty around the US government's green hydrogen rules — the strictest version of which were strongly supported by Hy Stor's CEO Laura Luce — is likely a mitigating factor in the project's difficulties.
“Obviously, that doesn’t help if you want to calculate your business case,” he admitted.
If realised, MCHH would use power directly supplied by on-site wind turbines and solar panels, with tens of thousands of tonnes of H2 stored in up to ten salt caverns across the Southern US state.
This would enable a constant supply of renewable hydrogen to proposed offtaker and Swedish steelmaker SSAB for the production of green steel, and other potential buyers.
Nel gave no indication as to whether its FEED contract for MCHH has been affected by Hy Stor’s cancellation of its capacity reservation agreement.
Nel is planning a 4GW electrolyser plant in Michigan, however it said it would have supplied 500MW of “electrodes” for MCHH from its existing plant in Herøya, Norway, currently under expansion.
Source:HydrogenInsight