One of the world’s leading electrolyser makers, Nel, has announced it is temporarily halting production at its flagship 1GW alkaline-electrolyser factory in Herøya, Norway, in response to a slower-than-expected green hydrogen market.
This will lead to a roughly 20% reduction in the workforce at the plant, although this includes lay-offs executed in the fourth quarter of 2024 through voluntary redundancies and termination of consultants.
The Norwegian company describes the moves as an adjustment of production capacity to market demand.
“The market for renewable hydrogen production technology has been slower than expected for the industry in general, including Nel,” the company said in a press release.
“Order intake in 2023 and 2024 fell short of expectations, and several customer projects are significantly delayed or are at risk of being cancelled.
“In addition, Nel has initiated a process to retain control over delivered equipment as compensation for more-than-one-year overdue receivables (from an undisclosed customer) as communicated in previous financial reports.
“As a result, Nel has limited need to produce new alkaline electrolyser equipment in the near-term and will adjust its production and organizational capacity correspondingly.”
CEO Håkon Volldal added: “While the long-term outlook for clean hydrogen remains strong, we must make some tough decisions today based on lower order intake in 2024 than expected. This is an unfortunate situation, and I’m sorry that we now have to let go of many qualified people.”
Nevertheless, Nel says it “continues to see a strong pipeline of clean hydrogen projects and is actively working on several concrete bids, including projects where Nel is currently undertaking paid front-end engineering design (FEED) studies”.
“Nel also sees good near-term opportunities to sell containerized PEM systems [which it manufactures at a factory in the US state of Connecticut].”
Nel chief financial officer added: “The company remains well financed, and with these actions we will preserve cash while still being able to aggressively pursue sales opportunities and invest in technology development.”
A recent report by analyst Guidehouse described Nel as one of the world's three electrolyser market leaders, alongside Thyssenkrupp Nucera and John Cockerill.
