number one by nature
Annual report
2022
The publication can be downloaded on
nelhydrogen.com
Title:
Annual report 2022
Published date:
Oslo, 28 February 2023
info@nelhydrogen.com
+47 23 24 89 50
Karenslyst allé 49, PB 199 Skøyen,
0212 Oslo, Norway
Table of contents
Annual report 2022
1 Letter from CEO ........................................................................................................ 5
2 Member of the board .............................................................................................. 9
3 Management .............................................................................................................. 10
4 Report from the Board of Directors ..................................................................... 13
4,1 Financial development .................................................................................. 16
4,2 Environment, Social and Governance reporting ..................................... 29
5 Board of Directors’ report in relation to the
Norwegian code of practice for corporate governance ................................. 54
6 Consolidated financial statements 2022 Nel group ......................................... 60
6,1 Notes to the consolidated financial statements ...................................... 68
7 Parent company financial statements .................................................................. 124
7,1 Notes to the parent company financial statements ............................... 132
8 Alternative performance measures ...................................................................... 149
9 Auditor’s report ......................................................................................................... 151
Nel ASA
I
Annual report 2022
5
A BIGGER, BETTER, MORE FOCUSED
COMPANY
An important year
2022 was the year the hydrogen industry made the
definitive transition from small to large-scale projects.
According to Nel’s research, orders for almost 5 GW of
electrolyser capacity were announced.
Multiple factors contributed to this important transition:
policymakers in the USA and European Union increased
production targets and improved support schemes
for renewable hydrogen projects; banks and financial
institutions gained more experience and understanding
of renewable hydrogen, making it easier for hydrogen
producers to finance their business plans; and green
hydrogen producers were able to secure attractive long-
term power purchase and offtake agreements with end-
customers.
At Nel, we also made the giant leap from small to large-
scale projects. Our order backlog more than doubled
in 6 months on the back of several exciting contracts.
Consequently, we continued to add substantial new
production and project execution capacity.
• In March, we inaugurated the world’s first fully automated
electrolyser manufacturing plant at Herøya in Norway.
The Norwegian Minister of Petroleum and Energy gave
the opening speech before 150 customers and partners.
We are happy to see that what we do is recognized and
appreciated by policymakers and customers, and that our
Herøya facilities set us apart from competition.
• In July, we signed a contract to supply 200 MW of
electrolyser equipment to a US customer. Only a few
months later, we received another large-scale contract
from Woodside Energy and a 40 MW contract from
Statkraft. These contracts are essential milestones on Nel’s
journey to large-scale electrolyser leadership.
• In November, we signed a joint development agreement
with General Motors, a company with extensive
experience in fuel cell technology development. The
purpose of the collaboration is to combine the two
companies’ expertise to develop Nel’s PEM (Proton
Exchange Membrane) electrolyser technology, with an
aim to reduce the cost of hydrogen at the pump for GM’s
vehicles.
• In December, we received a capacity reservation contract
for 16 hydrogen refueling stations from a US customer.
This is one of the most significant reservations of refueling
stations we have ever received. What an excellent way to
end the year!
Only the beginning
Green hydrogen is a powerful tool for addressing two of
the most pressing challenges the world is facing today
– ensuring reliable energy supply and fast-forwarding
decarbonization initiatives.
First, green hydrogen offers a way to transport renewable
energy from where it is possible and cheap to produce to
where it is needed and consumed. Hydrogen is an energy
vector that will help balance supply and demand in a global
energy market where trade flows and rules are redrawn.
Second, green hydrogen is a prerequisite for decarbonizing
hard-to-abate industries such as ammonia, methanol,
refinery, steel, aviation, shipping etc. where direct
electrification is complicated or even impossible.
The pipeline of new large-scale green hydrogen projects
is growing rapidly driven by these megatrends. Demand
is expected to increase further driven by the US Inflation
Reduction Act and the legislative and financial support
packages proposed by the EU Commission. I think that
everyone can agree that this development is good; we
don’t have much time to decarbonize our industries and
outcompete fossil fuels.
At the same time, the transition from small to large-scale
projects implies significant investments. The costs related to
the scale-up are real and evident in our bottom-line for the
year. Clearly, continuing along this trajectory for many years
is not sustainable. We need a path to industry leadership
that also allows Nel to become profitable, and this is
outlined in our business strategy coined “bigger better
focused”.
A pathway to industry leadership and profitability
Bigger. A market study conducted by Nel shows that large-
scale electrolyser projects will account for almost 90% of
demand from 2025. Similarly, in fueling, heavy-duty vehicles
are expected to become the most promising segment.
Nel will therefore concentrate on large-scale electrolyser
projects and high capacity fueling stations for high-volume
1 Letter from the CEO
6
Letter from the CEO
2022
2021
2020
2020
2019
2018
2017
2015
2014
2003
2001
1988
1974
1959
1953
1940
1927
Best regards,
Håkon Volldal, CEO
customers. We will continue to scale up our electrolyser
production capacity, both in Norway and in the US, as
higher volume is key to unlocking profitability and building
trust with customers. For Nel increasing volume is important
as it enables better resource utilization and hence higher
margins. For customers “seeing is believing” as they tend to
place orders with companies that can back up production
and delivery schedules with real assets.
Better. Being big is essential, but not enough to win in the
market. Nel must also have the best technology in terms
of total cost of ownership for the customer. Consequently,
Nel will continue to invest in research and development
to improve the efficiency (OPEX) and cost (CAPEX) of its
equipment. The joint development agreement with General
Motors is an example of such an investment. Besides
enabling more green hydrogen projects to become viable
without subsidies over time, continuous efficiency and cost
improvements are key to keeping healthy margins over time.
Better also means that Nel must continue to improve other
aspects of its business than technology. We need to mature,
improve and professionalize how we work to create added
customer value and improve profitability. Every year we hire
many skilled employees with backgrounds and references
from other industries we can learn from.
Focused. We cannot be the biggest and best at everything.
To achieve a leading industry position and make Nel
profitable, we must concentrate on what we really do well
and not spread ourselves too thin. Creating sufficient focus
in Nel is, simply put, one of my top priorities going forward.
In Electrolyser, Nel has narrowed its scope of supply from
providing complete hydrogen plants worldwide to delivering
electrolyser stacks and gas separation modules to customers
in Europe and North America. The remaining scope is now
delivered by strategic EPC (Engineering, Procurement and
Construction) partners. This scope split allows Nel to deliver
standardized solutions with less risk and higher margins.
In Fueling the product portfolio will be reduced and the
focus will be on developing a high-capacity solution
for European and North American volume customers.
Development and production of certain modules will also be
outsourced to world-class external partners.
At the grand opening of the Herøya plant I had not yet
joined Nel officially, but I was there in the audience. I was
impressed by what the Nel team had carried out so far
and felt motivated by the company’s mission to “unlock the
potential of renewables and enable global decarbonization.”
Now, just over half a year later, I have an even stronger
belief in Nel. This belief rests on the role green
hydrogen will play in the global energy transition and
decarbonization efforts, the vast potential for cost and
efficiency improvements that will make green hydrogen
competitive with fossil fuel, and the ongoing industry scale-
up that will enable large projects all over the world. Most
importantly, my belief rests on my 600 colleagues in Nel,
who undoubtedly have the industry’s deepest hydrogen
knowledge. Together we will make Nel a bigger, better, and
more focused hydrogen technology company.
MORE THAN 90 YEARS OF HYDROGEN INNOVATION.
AND THAT’S JUST THE BEGINNING.
PIONEERING RENEWABLE HYDROGEN
FOR MORE THAN 90 YEARS
Signed the first large scale 200MW electrolyser contract
Starting up the Herøya plant, first line
Setting new record order sizes with orders from Nikola, Everfuel, Iberdrola and Iwatani
Corporation
Nel opens first H2Station™ in Korea
Nel announces construction plans for the world’s largest electrolyser
manufacturing plant to accommodate multi-billion NOK orders
Nel completes construction of the world’s largest manufacturing plant
for hydrogen fueling stations, with a capacity of 300 units per year
Nel acquires Proton OnSite, adding world leading PEM electrolysis
technology to product portfolio, becoming the world’s largest
electrolyser company
Nel acquires H2 Logic, adding world leading hydrogen fueling
technology to the product portfolio
Nel becomes the first 100% dedicated hydrogen company
listed on the Oslo Stock Exchange
Nel opens the world’s first publicly available hydrogen fueling
station in Reykjavik, Iceland
Our first pressurised electrolyser introduced to the market
The world’s first electrolyser supplier to provide non-asbestos
alkali electrolysers
Our renowned electrolyser technology made available for
other companies and other industries
Complete redesign of the electrolyser unit, forming the basis for
today’s atmospheric electrolyser from Nel
Starts up a second large scale hydropowered electrolyser plant for
supplying hydrogen to ammonia production, in Glomfjord, Norway
The largest installation in the world of water electrolysers at Rjukan,
Norway, with a total hydrogen production capacity exceeding 30.000 Nm3/
hour, from hydropower
The first small electrolyser installation at Norsk Hydro, Notodden, Norway. Testing
for pure hydrogen to fertilizer production
2022
2021
2020
2020
2019
2018
2017
2015
2014
2003
2001
1988
1974
1959
1953
1940
1927