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Nel and H2V Product enter French framework deal for world’s largest power-to-gas project

Nel ASA has announced that it has entered into an exclusive NOK 450 million (≈ EUR 47.67 million) framework agreement with H2V Product for the design, construction and maintenance of a 100 MW turnkey renewable hydrogen production plant in France. The agreement is part of a programme that includes an additional six planned renewable hydrogen plants, totalling 700 MW, in France.

Norway-headed hydrogen value chain solution provider Nel ASA has announced that it has entered a framework agreement with France-based H2V Product, a subsidiary of Alain Samson owned Samfi-Invest Group, for the design, construction and maintenance of industrial-scale turnkey renewable hydrogen production plants.

A Nel A – Atmospheric Electrolyser (photo courtesy Nel Hydrogen Solutions).
A Nel A – Atmospheric Electrolyser (photo courtesy Nel Hydrogen Solutions). A Nel A – Atmospheric Electrolyser (photo courtesy Nel Hydrogen Solutions).

According to a statement, Nel will serve as a supplier to H2V Product as a part of its major industrial power-to-gas programme in France. The programme aims to reduce carbon dioxide (CO2) impact by using  H2V Product’s green hydrogen plants to inject hydrogen as a substitute for fossil gas into the gas pipeline grid.

 We are excited to announce this agreement with H2V Product for the largest industrial-scale power-to-gas project ever seen. Under the contract, Nel will design, construct and maintain a hydrogen production facility with an initial power target of 100 MW and 40 electrolysers. The carbon free hydrogen will be injected into the main gas pipeline that distributes natural gas throughout France, making the natural gas greener. This is truly a milestone agreement for Nel, said Jon André Løkke, CEO of Nel.

The first 100 MW renewable hydrogen plant will be developed from 2018-2020 and represents a contract value of approximately NOK 450 million (≈ EUR 47.67 million). It will be built in Les Hauts de France and Normandie Régions, next to the natural gas pipelines, where the site and exclusivity already are secured by the property prospector team of H2V Product.

Our projects are developed by H2V Product in collaboration with the general services of Samfi-Invest and local engineering partners, as well as with the technology support from the Norwegian manufacturer Nel. Their large-scale electrolysers are proven to be the world´s most efficient and reliable, making them a perfect fit for our important industrial development. We are looking forward to working with Nel to furnish, install and ensure the maintenance of 40 electrolysers in our first H2V Product hydrogen plant, with a planned expansion to six other plants in France towards 2025, said Lucien Mallet, Founder and CEO of H2V Product.

The site of the hydrogen production facility can hold significantly more capacity and the target is to continue to add an additional six H2V Product plants, totalling 700 MW, in the period between 2020-2025 for a total contract value of at least around NOK 3.15 billion (≈ EUR 333.68 million).

Aside from the initial contract announced today, the partnership itself represents significant opportunities for further extensions. Through this partnership, we are in a pole position for taking advantage of the existing natural gas infrastructure in France and bringing renewable hydrogen production to unparalleled industrial levels, said Løkke.

Expansion plans for Nel

The parties are expected to reach a final agreement on the delivery schedule during the second half of 2017. In order to comply with the contract, Nel would be required to expand its production capacity. A formal investment decision related to capacity expansions is expected to be made towards the end of 2017 and as soon as the initial, non-refundable, pre-payment has been received.

We are now preparing to expand our production capacity at Notodden, Norway, during 2018, with supporting production capacity in France. By adding production equipment and increasing number of operator shifts, Nel Electrolyser can increase its production capacity by 7 to 8 times with relatively limited investments, said Løkke.

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