Nel ASA: A Cheaper Electrolyser and a First-Ever Utility Client, Yet Orders Are in Freefall

Nel ASA's new electrolyser promises 40-60% cost reduction, but Q1 orders plunged 73%. Post-quarter PEM deals and first public utility sale offer hope; cash buffer intact.

Nel ASA’s new pressurised alkaline electrolyser platform, unveiled on 6 May, promises to slash system capital expenditure by 40 to 60 percent compared with current market offerings. For a turnkey plant, the Norwegian group claims the cost would land below $1,450 per kilowatt — roughly half the $3,000 per kilowatt that many industrial projects still carry. That is a potentially game-changing economics story for green hydrogen. But the company’s first-quarter numbers painted a very different picture: orders collapsed.

New order intake in Q1 2026 plunged 73 percent year-on-year, dragging the total order book down to 1.113 billion Norwegian kroner, a 24 percent drop from the prior quarter. CEO Håkon Volldal described the period as “rather quiet” on the intake front. The stark contrast between the technological promise and the commercial reality has left the stock walking a tightrope.

A rare bright spot arrives after quarter-end

Shortly after the quarter closed, Nel signed two separate purchase agreements in the PEM segment, each worth around $7 million. One came from Mesure Process, a subsidiary of Synqo Energies — a repeat customer. The other was placed by Douglas County Public Utility District in Washington State. That transaction marks a first for Nel: selling a green hydrogen installation to a public utility. The plant will use surplus hydropower to stabilise the local grid, with start-up scheduled for the first half of 2027.

“This is the first green hydrogen plant Nel has sold to a public utility operator,” said Todd Cartwright, the company’s chief commercial officer. Reference contracts of that kind carry weight in a sector still struggling with financing hurdles and project delays. Volldal added that more PEM deals could follow before the half-year mark.

Financials still bleeding, but cash buffer holds

Nel’s first-quarter customer revenue came in at 148 million Norwegian kroner, down 5 percent from the same period last year. Earnings before interest, taxes, depreciation and amortisation (EBITDA) were negative 100 million kroner — an improvement of 15 million kroner from Q1 2025, but still deep in the red. The company’s cash position remained relatively stable at roughly 1.4 billion kroner, enough to cover operations until the end of 2026, management says.

However, that safety net may face a fresh dent. Nel is reviewing the carrying value of two idle production lines at its Herøya site, originally built for atmospheric alkaline electrolysers. Whether the lines are restarted, sold or scrapped is undecided, but an impairment charge is realistic — and the balance sheet already absorbed 799 million kroner in write-downs last year.

Cost-cutting shows results, but at a human cost

Headcount has been reduced by 26 percent from its peak, leaving Nel with roughly 300 employees. Personnel expenses fell 21 percent in the first quarter. The company says it can ramp back up as orders flow, but for now the focus is on survival and scaling down the cost base. “Less growth euphoria, more emphasis on endurance and scaling,” summarised the primary source.

The new platform takes centre stage

The upgraded alkaline offering underwent full-scale testing at Herøya and is now ready for commercial deployment. Industrialisation follows the capital investment decision taken in December 2025. Herøya’s initial capacity target is up to 1 gigawatt per year, with a roadmap stretching to 4 gigawatts. An EU grant of €11 million, the first tranche of which is expected in the current quarter, will support the ramp-up.

If Nel delivers the promised cost reduction, the economics of green hydrogen improve markedly. But the market is waiting for concrete purchase contracts, not just engineering milestones. The half-year report, due on 15 July 2026, will be the next hard test. All eyes will be on order intake, cash burn and progress with the new platform.

Nel’s equity has rallied roughly 48 percent from the start of 2026, recovering from a 52-week low of €0.18 to trade around €0.28 on Tradegate. That optimism is priced on the assumption that the technology story is about to translate into commercial traction. The first-quarter data suggests the transition remains painfully slow.