Nel ASA Secures Final Investment Decision for Major Hydrogen Expansion

The Norwegian hydrogen technology firm Nel ASA has reached a pivotal moment, committing to a large-scale manufacturing plan after years of development. The company’s board has given the final investment decision (FID) to construct up to 1 GW of production capacity for its next-generation electrolyzer platform, a move significantly de-risked by substantial European Union funding.

A critical element enabling this decision is the robust financial backing from the EU Innovation Fund. This support provides a considerable safety net for the company’s ambitious plans. The funding agreement includes:
* A maximum grant amount of 135 million euros from the EU.
* Coverage of approximately 60% of relevant capital and operational expenditures.
* An initial disbursement of over 10 million euros expected immediately following the FID.
* An initial equity investment from Nel of 300 million NOK for the first 1 GW capacity phase, calculated before grant deductions.

From Prototype to Industrial Scale

This decision culminates a seven-year development cycle that began in 2018. The company has successfully validated its "Next Generation Pressurized Alkaline" platform through prototype testing at its Herøya Industrial Park. The confirmed system efficiency gave the board the necessary confidence to proceed with industrial-scale manufacturing.

Market reaction to the clarified roadmap was positive. On the day of the announcement, Nel’s share price advanced by 4.11% to 2.38 NOK, building a cushion of roughly 22% above its 52-week low.

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A New Technological and Economic Paradigm

The investment marks a strategic shift for Nel. The new platform utilizes a modular design where pre-assembled units are housed in standard containers. This approach eliminates the need for expensive dedicated production halls, as the systems are engineered for outdoor operation.

CEO Håkon Volldal emphasized that the significantly improved levelized cost of hydrogen (LCOH) is intended to unlock business models previously considered uneconomical without heavy subsidies. The capital expenditure for the new pressurized alkaline technology is notably lower than that of the company's legacy systems.

Managing the Legacy Portfolio

The focus on the new pressurized technology has implications for existing assets. Nel is currently reviewing the book values of two currently idled production lines for atmospheric alkaline electrolyzers at Herøya. This evaluation suggests a potential gradual phase-out of the older technology in favor of the more efficient new generation, which may lead to asset write-downs in the near term.

The Road Ahead: Execution is Key

With financing secured and technology validated, Nel is transitioning from a developer to an industrial-scale manufacturer. The implementation schedule is both ambitious and specific: commercial launch of the new systems is targeted for the first half of 2026, with large-scale deliveries following in 2027. Investor focus will now shift to management's ability to execute this timeline without delays and to draw down the EU funds as scheduled.