Electric Hydrogen (EH2 has secured a $100m loan from banking majors to finance the manufacturing and deployment of its 100MW hydrogen electrolyser plants.
Led by HSBC, the funding saw participation from J.P. Morgan, Stifel Bank and Hercule Capital, as the company aims to deliver its first PEM electrolyser stacks to a project in Texas later this year (2024).
Read more: Large-scale Texas green hydrogen project to utilise EH2’s 100MW electrolyser system
The Massachusetts-based company, which had previously been backed by Bill Gates’ Breakthrough Energy, Microsoft, Amazon and more, aims to construct a 1.2GW factory for its PEM electrolyser systems.
EH2 has grabbed attention for its engineered and pre-assembled 100MW electrolyser systems. The fully standardised plant includes all key components which it says will reduce total project and operating costs.
Targeting deployments in sectors such as steel, fertilisers, shipping and aviation, Derek Warnick, Chief Financial Officer (CFO) at EH2, said the corporate credit financing marked a “step-change” in the company’s access to capital and “overall maturity as a business.”
“With credit backing from some of the largest and most well-known banks, we are well positioned to deliver gigawatts of electrolyser plants in the coming years and enable our customers to meet their decarbonisation goals,” the CFO added.
Matt Perlow, Director, HSBC Innovation Banking, said the bank was “thrilled” to support EH2’s deployment of large-scale electrolyser plants.
It comes after the company secured $50m in equipment financing from Trinity Capital to support the Devens plant. EH2 was also awarded a $18.3m tax credit from the Inflation Reduction Act’s (IRA) 48C initiative.
Read more: EH2’s 1.2GW electrolyser factory support with $18.3m IRA tax credit
In March, AES Corporation reserved capacity for 1GW of EH2’s electrolysers. The utility and power firm in 2022 with Air Products said it would invest $4bn into a green hydrogen production plant in Texas. The site was expected to start operations in 2027.
Read more: AES Corporation reserves capacity for 1GW of EH2’s large-scale electrolysers
© McPhy EnergieDienst
It seems incredible that in the space of two years discussions have moved from rapidly scaling electrolyser manufacturing to the potential oversupply of the hydrogen production equipment.
We’ve come a long way from the European calls in May 2022 to “remove all obstacles,” as EU electrolyser manufacturers and the Commission committed to increase annual manufacturing capacity to 17.GW by 2025.
In recent months, however, more alarm bells have started ringing to suggest the global electrolyser market could be oversaturated by 2025.
Research house BloombergNEF (BNEF) and Citigroup has reported that 71GW of electrolyser manufacturing capacity is scheduled to be online globally by the end of 2024. However, the research said demand is only projected to reach 10GW in 20251 – a potential oversupply of 61GW…
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