Nel ASA unveils a new alkaline electrolyser cutting green hydrogen costs by 60%, but a 73% order plunge and idle production lines keep investors cautious.
The numbers tell two very different stories at Nel ASA. One is a technological leap that promises to slash the price of green hydrogen production by more than half. The other is a stark reminder that even the best engineering cannot manufacture demand overnight.
After eight years of development, the Norwegian hydrogen specialist has pushed its new pressurised alkaline electrolyser platform into commercial deployment. The headline figure is arresting: turnkey costs for a 25-megawatt system come in at under $1,450 per kilowatt, a reduction of up to 60 percent against conventional solutions that routinely exceed $3,000 per kilowatt. The system delivers hydrogen at 30 bar pressure with 99.99 percent purity, largely eliminating the need for downstream compressors.
CEO Håkon Volldal called the launch a decisive step toward making renewable hydrogen competitive, particularly for long-duration storage and decentralised energy supply. The timing benefits from a supportive regulatory backdrop: the European Commission has approved roughly €5 billion in state aid for industrial decarbonisation, with green hydrogen and electrification explicitly in the crosshairs.
Yet the market response was muted at best. Nel’s shares closed at €0.26 on Friday, a modest 0.58 percent daily gain but a full 17 percent below the 52-week high of €0.32 touched in early May. The relative strength index has dropped to 35.6, territory that typically signals an oversold condition. The stock has still managed a 36 percent advance since the start of the year and sits comfortably above its 200-day moving average, but annualised volatility of nearly 90 percent underscores how jittery investors remain on hydrogen names.
Should investors sell immediately? Or is it worth buying Nel ASA?
The caution is rooted in the order book. Nel booked just 85 million Norwegian kroner in new orders during the first quarter, a 73 percent collapse from the prior-year period. The total order backlog shrank to around 1.1 billion kroner. Two existing production lines at Herøya are currently idle, raising the spectre of substantial impairment charges as the company pivots to the new platform.
Analysts are keeping their powder dry. Berenberg trimmed its price target to 2.30 kroner, while Citigroup cut to 2.40 kroner, both citing uncertainty around commercial scaling. The consensus target now sits at 2.14 kroner.
There are glimmers beyond the near-term gloom. Nel’s PEM division secured a $7 million European order for hydrogen refuelling stations and industrial supply, with operations expected to start in 2027. The BarMar project — a 400-kilometre offshore pipeline designed to carry hydrogen from Barcelona to southern France — is in public consultation and could eventually require enormous production capacity.
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Financially, the company is on solid ground. Management says the 1.4 billion kroner in cash will last through the end of 2026, and a first tranche of EU grant funding exceeding €10 million is due in the second quarter.
The real test comes on July 15, when Nel releases its half-year results. By then, investors will want to see whether conversations with potential buyers are hardening into binding contracts. A technology that halves costs is impressive. An order book that proves it can move the needle is what the market is waiting for.
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