Norwegian company Nel has decided to temporarily halt production at the alkaline electrolyzer production facility in Herøya, Norway.
The decision follows lower-than-expected order intake in 2023 and 2024, Nel revealed, adding that several customer projects are significantly delayed or are at risk of being cancelled. In addition, the company has initiated a process to retain control over delivered equipment as compensation for what is said to be more-than-one-year overdue receivables from an undisclosed customer.
As a result, Nel said it has a limited need to produce new alkaline electrolyzer equipment in the near-term and will adjust its production and organizational capacity correspondingly.
Nel’s President and CEO Håkon Volldal stated: “While the long-term outlook for clean hydrogen remains strong, we must make some tough decisions today based on lower order intake in 2024 than expected. This is an unfortunate situation, and I’m sorry that we now have to let go of many qualified people.”
The adjustments will predominantly impact the Norwegian workforce in the alkaline business segment. As disclosed, the planned reductions will affect roughly 20% of the full-time employees reported at the end of the third quarter of 2024. Nel noted that approximately half of the reductions have already been executed in the fourth quarter of 2024 through voluntary resignations and termination of consultants.
Nel’s CFO Kjell Christian Bjørnsen said: “The company remains well financed, and with these actions we will preserve cash while still being able to aggressively pursue sales opportunities and invest in technology development.”
To note, the Norwegian company is, reportedly, actively working on several concrete bids, including projects where it is currently undertaking paid front-end engineering design (FEED) studies. Furthermore, Nel claimed it sees good near-term opportunities to sell containerized proton exchange membrane (PEM) systems. Further development of current and next-generation technology platforms is also on the company’s agenda.
In 2024, Nel pronounced itself as a company solely dedicated to developing and delivering electrolyzers to produce renewable hydrogen. At the same time, the company’s former fueling division was spun out and listed on the Oslo Stock Exchange as Cavendish Hydrogen.