Norwegian hydrogen company Nel has taken a decisive step toward large-scale clean hydrogen production, approving construction of up to 1 gigawatt of manufacturing capacity for its Next Generation Pressurized Alkaline technology at its Herøya facility in Norway.
The final investment decision follows seven years of development and the successful start-up and production of clean hydrogen from a full-scale prototype. The project is backed by the EU Innovation Fund, underscoring growing European support for industrial-scale hydrogen deployment.
Development of the new pressurized alkaline system began in 2018. After extensive testing of smaller stacks, Nel has now completed full-scale validation at Herøya Industripark, confirming what it says is market-leading system efficiency. Commercial launch is targeted for the first half of 2026, with large-scale deliveries expected from 2027.
Drawing on a century of electrolyser expertise, Nel says the new platform marks a step change in hydrogen economics, sharply reducing capital expenditure while improving energy efficiency. The result is a lower levelized cost of hydrogen (LCOH), a key hurdle for widespread adoption of clean hydrogen technologies.
“Our new solution is extremely important for Nel as a company, but also for the clean hydrogen industry as a whole. A significantly improved levelized cost of hydrogen is expected to unlock business cases that were previously not viable without significant subsidies,” says Håkon Volldal, President and CEO of Nel.
The system is built around a fully modular, skid-based design, with each unit pre-fabricated and factory-tested before being shipped in standard container skids.
Nel says this approach dramatically simplifies engineering and installation, turning complex infrastructure projects into standardized product deliveries. The platform is also designed for outdoor operation, eliminating the need for dedicated buildings and further reducing costs.
To support industrialization, Nel has been awarded up to EUR 135 million from the EU Innovation Fund. The grant, which can cover up to 60% of eligible capital and operating costs, is intended to enable total annual production capacity of up to 4 GW across the platform.
The initial 1 GW build-out at Herøya is expected to require around NOK 300 million in investment before grants. The milestone-based EU funding is set to release more than EUR 10 million as a first payment following the investment decision, with capital spending spread across 2026 and 2027.
Nel says overall capital requirements are significantly lower than for traditional atmospheric alkaline production lines.
As the new pressurized alkaline solution moves toward commercialization, Nel is also reviewing the book values of its two existing 500 MW atmospheric alkaline production lines currently idling at Herøya, signaling a potential strategic shift toward the next-generation technology.
