French hydrogen firm McPhy saw electrolyser orders halve in 2023, but massive factory expansion will continue

French electrolyser company McPhy has admitted in an update to the market that its firm order intake for 2023 was only €13m ($14m), a 56% drop from the €29.4m it announced for 2022.

The firm points towards the delayed 20MW Djewels project in the Netherlands as the main reason for this decline. While the project’s developer HyCC had signed a contract with McPhy in July last year, this was subject to a final investment decision (FID) at the end of 2023.

However, HyCC has pushed this step back to the first half of 2024 as it is still awaiting EU approval for a subsidy from the Dutch government. As such, the French electrolyser maker could not include the contract in its firm orders for 2023.

But while Djewels accounts for a major drop in firm orders, McPhy’s total order backlog for its alkaline electrolysers also shrank from €30.6m in 2022 to €23.8m for the past year.

This is despite the firm tendering for 2.2GW of projects — “a two-fold increase on last year” — and securing a 64MW order with the oil & gas division of Berlin-based commodities trader HMS.

Even with the shrinking backlog, McPhy had increased its production capacity at its factory in San Miniato, Italy, to 300MW and is on track to commission its planned gigafactory in Belfort, France, in the second quarter of this year, for which it is finalising a €16m finance lease with a group of banks.

The French company’s revenue had grown by 17% year-on-year, with accelerating sales in the second half of 2023, “driven mainly by the consumption of the backlog”, it explained.

However, figures for profit and loss on these contracts have not been released, with the full financial results for 2023 due to be published on 7 March.

McPhy’s share price has fallen by more than 80% since February 2023, similar to headwinds for other publicly listed electrolyser manufacturers.

Incidentally, HyCC had announced in December that it had also cancelled a contract for electrolysers with Norway’s Nel after postponing its its 40MW H2eron project to 2028, citing slow development of a market for green hydrogen and high project costs.

However, it had not explicitly cancelled H2eron, stating that it would increase the capacity to 50MW to reduce the levelised cost of hydrogen production and was still negotiating a new contract with Nel.