Scaleable to 5GW | Topsoe earmarks $300m for new 500MW hydrogen electrolyser factory in the US
Inflation Reduction Act subsidies spur Danish company to schedule final investment decision by the end of this year
Danish electrolyser manufacturer Topsoe plans to spend $300m on a new electrolyser factory of “at least” 500MW in the US — with the potential to eventually scale it up to 5GW — as part of an effort to grab a slice of the country's expected subsidy-driven growth in green hydrogen production.
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The company is yet to settle on a site for the US factory, but a spokesperson for the company said it is in discussion with a number of potential customers and local officials to determine the best location.
Topsoe is just the latest company to switch its attention to the US market in the wake of the massive growth expected as a result of the Inflation Reduction Act (IRA), which offers a maximum production tax credit of $3/kg for green hydrogen production.
The company wants to cater for an expected uptick in demand for electrolysers expected in the coming years, once the subsidies start flowing.
“The Inflation Reduction Act came out not that long ago and that immediately prompted us to start looking in the US,” Topsoe CEO Roeland Baan told Bloomberg this week. “We need to be there. We need to have a production facility to cater to customers there.”
Topsoe will likely be gunning for a slice of demand for green hydrogen projects in the US’s hard-to-abate sectors — such as the production of low-carbon steel, chemicals, refining and green ammonia — for which the company’s high-temperature SOE technology is best suited.
This is pertinent as electricity accounts for about 70% of green hydrogen production costs — and SOEs could carry even more appeal in regions with high power prices.
But these high efficiency levels and low opex come with a massive price tag: the capex costs on SOEs are around seven times’ that of alkaline electrolysers, and five times that of PEM, according to 2020 estimates from the International Renewable Energy Agency.
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