Nel ASA Pivots to Defence as New Modular Electrolyser Cuts Costs by Half

Nel shifts from large-scale industrial hydrogen projects to modular alkaline pressure electrolysers for defence and resilience, aiming to cut costs by half and speed deployment.

The Norwegian hydrogen specialist Nel has found a new growth narrative beyond its traditional industrial base. By targeting energy security and defence?adjacent applications with a newly commercialised alkaline pressure electrolyser, the company is tapping into demand for decentralised, resilient power systems. Investors have taken note: the stock surged on Tuesday in Oslo, building on a 44.39% gain over the past 30 days, though it remains 12.54% lower on the week after Friday’s selloff.

The strategy shift is straightforward. Instead of relying solely on large?scale central projects that have been plagued by long lead times and ballooning costs, Nel is now marketing modular units that can be installed close to end?users. Chief Commercial Officer Todd Cartwright said customers are increasingly asking for solutions that are “simpler to deploy and easier to finance,” particularly where resilience matters. The new platform, an alkaline pressurised electrolyser built on skid?mounted modules, is designed to operate outdoors at 15 bar and delivers hydrogen at 30 bar with 99.99% purity.

Cost is the headline. Nel estimates a turnkey price of less than $1,450 per kilowatt for a 25?megawatt system, compared with roughly $3,000 per kilowatt for many current industrial projects. The company spent more than eight years developing and testing full?size prototypes at its Herøya facility in Norway before declaring the system ready for commercial use. The goal is to slash capital expenditure and shorten project timelines, reducing execution risk for buyers.

The push into security and defence comes at a time when the broader hydrogen sector is becoming more competitive. Enapter recently launched its “Stack 250” generation of AEM electrolysers, capable of producing around 100 kilograms of high?purity hydrogen per day – roughly ten times the output of its predecessor. Enapter is positioning its modular systems for plants over 100 MW and for hybrid configurations alongside alkaline units. Sunfire, meanwhile, is building a test electrolyser at a BASF site in Schwarzheide, Germany, while Uniper is clearing ground in Gelsenkirchen?Scholven for a hydrogen?ready gas?fired power plant and working with thyssenkrupp Uhde on an ammonia demonstration cracker. In the Philippines, HDF Energy is planning commercial hydrogen power plants that combine solar, lithium?ion batteries and hydrogen storage to deliver baseload power.

Nel’s own financials remain mixed. In the first quarter of 2026, the company posted revenue of NOK 148 million from customer contracts, down 5% year?on?year, and an EBITDA loss of NOK 100 million – the same negative figure reported in the secondary article. The order book was quiet, but Chief Executive Håkon Volldal noted momentum in the PEM business. Liquidity is solid: Nel held roughly NOK 1.4 billion in cash. A $7 million order from the United States was secured, and a new pressurised alkaline electrolyser was delivered in early May.

Support from the EU Innovation Fund could accelerate the platform’s industrialisation. Nel is eligible for up to €135 million in grants, covering as much as 60% of eligible costs. The first tranche of €11 million is expected in the second quarter of 2026, following a final investment decision taken in December 2025. That cash will help scale production of the modular electrolyser.

The stock’s recent performance has brought it close to RBC’s price target of NOK 3, where the bank rates the shares “Sector Perform.” At Monday’s close in Oslo, the stock traded at NOK 2.940. The year?to?date return now stands at 42.93%, according to the secondary article, while the primary article notes the 44.39% rise over 30 days. Short?term volatility remains, but the real test will come on 15 July, when Nel publishes its half?year report. Investors will be watching whether discussions on projects in the 50? to 150?megawatt range turn into firm contracts. For now, the security narrative gives the market a fresh reason to believe the cost?cutting platform can deliver more than just good arguments.