French electrolyzer McPhy grows order book, secures German steel project

French electrolyzer and hydrogen refueling station manufacturer McPhy grew its order book by over 50% in 2022, landing a contract for a low-carbon steel project in Germany and securing funding for its planned 1 GW/year Belfort factory, the company said in a statement late Jan. 24.

Its firm order intake rose 53% to Eur29.4 million ($32 million) in 2022, with a portfolio of 45 MW of electrolysis and 40 hydrogen filling station projects signed, commissioned or under execution as of Dec. 31, 2022.

The company is a preferred partner or selected supplier for a further 148 MW of electrolyzers and 56 stations.

“These are the first indications of upcoming deployments in low-carbon hydrogen as the market is getting more structured,” CEO Jean-Baptiste Lucas said in the statement.

Lucas said the first national grants from the EU’s Important Projects of Common European Interest (IPCEI) would “foster the development of production capacities and will shortly be followed by a second wave of funding, which will fuel demand and the transition to larger-scale projects.”

McPhy took a final investment decision and started construction of its 1 GW/year production facility in Belfort, France, following a successful IPCEI grant application in 2022.

McPhy received a first payment of Eur28.5 million from the French state, as part of a Eur114 million grant.

The plant is due to start operations in the first half of 2024, ramping up gradually to reach 1 GW/year production capacity.

The gigafactory “will allow us to lower the cost of our electrolyzers and increase their capacity in order to provide competitive low-carbon hydrogen very quickly,” Lucas said.

In the meantime, McPhy has scaled up capacity at its San Miniato factory in Italy to 300 MW/year to meet demand while waiting for the Belfort plant to come online.

Platts, part of S&P Global Commodity Insights, assessed the cost of producing renewable hydrogen via alkaline electrolysis in Europe at Eur8.45/kg ($9.18/kg) Jan. 24 (Netherlands, including capex), based on month-ahead power prices. PEM electrolysis production was assessed at Eur10.25/kg, while blue hydrogen production by steam methane reforming (including carbon, CCS and capex) was Eur4.12/kg.

McPhy secured an equipment order at the end of 2022 from an industrial joint venture for low-carbon steel production in Germany, close to the company’s design and engineering site in Wildau.

It covers two 1-MW electrolyzers and a dual pressure 350/700 bar fueling station for forklift trucks and trailer trucks, McPhy said, with a five-year services contract.

First steel deliveries from the project are expected in the first half of 2024.

McPhy said the order highlighted “the relevance of the group’s European operating setup.”

Some in the industry fear electrolyzer producers outside Europe could develop a competitive advantage through cheaper manufacturing, such as in China and elsewhere.

Other electrolyzer manufacturers are facing problems scaling up. The UK’s ITM Power is reviewing its operations following several profit warnings, and previously shelving plans to build a new factory in Sheffield.

McPhy also finalized an eight-year maintenance contract with Siemens Energy in 2022.

McPhy said 2022 marked a return to sustained sales growth, with revenue up 22% to Eur16 million, reflecting the materialization of first orders under “major” contracts in recent years.

Losses are anticipated at Eur34 million to Eur37 million, as the company invests and scales up.

— James Burgess