Nel ASA Secures Major Funding and Sets Timeline for Next-Gen Electrolyzer Production

Nel ASA NO0010081235

Nel ASA has reached a pivotal strategic milestone. The Norwegian hydrogen technology firm has received the final investment decision (FID) for its Next Generation Pressurized Alkaline electrolyzer platform, a move significantly de-risked by securing a substantial financial commitment from the European Union. This decision transitions the company from a lengthy development phase into the stage of industrial manufacturing.

A key pillar of this advancement is funding from the EU Innovation Fund, which is set to contribute up to €135 million. This grant is structured to cover as much as 60% of the project's relevant capital and operational expenditures, dramatically reducing Nel's equity requirement. Disbursements are tied to project milestones, with the FID itself triggering an imminent first payment exceeding €10 million.

The total project investment, before accounting for the EU grant, is estimated at 300 million Norwegian kroner. These expenditures are scheduled across 2026 and 2027, aligning with the planned ramp-up of production capacity.

New Technology Targets Lower Hydrogen Costs

The newly approved platform represents a fundamental shift from Nel's previous atmospheric alkaline systems. Developed and tested at full scale over seven years at the Herøya industrial park, the technology promises leading system efficiency for green hydrogen production.

The benefits are quantifiable. The pressurized design achieves a drastic reduction in capital expenditure per system compared to older atmospheric lines, while simultaneously improving energy efficiency. This combination drives down the levelized cost of hydrogen (LCOH). Furthermore, its modular, skid-based design simplifies logistics and installation, and the systems are built for outdoor operation, eliminating the need for dedicated buildings. This technological leap could potentially bring previously subsidy-dependent projects into the realm of economic viability.

Production Scale and Legacy Assets

With the FID in place, Nel ASA has been authorized to establish a 1 GW production capacity at its Herøya facility. The commercial launch for the new pressurized alkaline systems is targeted for the first half of 2026, with high-volume deliveries expected to commence in 2027. The company's ambition is to scale annual production capacity to as much as 4 GW by that time.

This strategic pivot to pressurized technology has prompted a review of existing infrastructure. Nel is currently assessing the book values of two idled 500 MW production lines for atmospheric alkaline electrolyzers at Herøya. This evaluation indicates potential write-downs as the company phases out the previous generation of technology.

Recent Orders and Analyst Sentiment

The investment decision follows a series of positive business developments for Nel. In November 2025, the company secured a PEM electrolyzer order worth over $50 million for the HyFuel and Kaupanes hydrogen projects. It was also selected as the technology provider for the GreenH hydrogen projects in Kristiansund and Slagentangen.

Market analysts are cautiously optimistic. Citi recently raised its price target on Nel shares to 2.70 Norwegian kroner from 2.50 kroner, while maintaining a "Hold" rating. The consensus view reflects the company's current transitional phase, straddling the gap between advanced development and industrial-scale manufacturing.