Electrolysers

Nel earns a quick $20m from renegotiating supply contract for Fortescue's first US green hydrogen project

The unexpected income is a short-term boost for the Norwegian electrolyser maker, which did not announce any new supply deals in the fourth quarter of 2023

A rendering of the proposed Phoenix Hydrogen Hub.
A rendering of the proposed Phoenix Hydrogen Hub.Photo: Fortescue

Norwegian electrolyser firm Nel has announced it has booked $20m in revenue after renegotiating a contract to supply the Phoenix Hydrogen Hub.

Stay ahead on hydrogen with our free newsletter

Keep up with the latest developments in the international hydrogen industry with the free Accelerate Hydrogen newsletter. Sign up now for an unbiased, clear-sighted view of the fast-growing hydrogen sector.
Sign up now

The project’s original developer, truck maker Nikola Motors, had purchased 85MW of alkaline stacks from Nel, but the Phoenix Hydrogen Hub has since been sold to Australian mining and energy company Fortescue.

The Australian firm had announced last November it would invest $550m towards building the facility in the second half of this year, with an eye towards starting production of liquid green H2 from mid-2026, to supply road transport in Arizona and neighbouring states such as California.

In addition to reducing the capacity down to 80MW, Fortescue has signed a new contract with Nel which cuts out the balance-of-plant equipment and refuelling stations that would have been supplied in the original deal.

However, the Australian firm has agreed to compensate Nel with $9m for this reduction in scope.

Hydrogen Insight has reached out to Fortescue to confirm whether the decision to cut out refuelling stations from the new contract means it will seek a different supplier or if it has pivoted towards selling green hydrogen produced at the Phoenix Hydrogen Hub to third-party filling stations.

The new deal also comes with updated guarantees and warranties for the equipment and changes in the scope of delivery, for which Nel will receive a further $11m.

Nel had booked no new orders in the fourth quarter of 2023 — results for which are due to be released at the end of February — which this week prompted analysts to warn that the company is unlikely turn its fortunes around amid a global oversupply of electrolysers to the market and greater competition from Chinese manufacturers with cheaper equipment.
(Copyright)
NelFortescueUSElectrolysersalkaline electrolysers
Published 2 February 2024, 14:06Updated 2 February 2024, 14:06