US-based electrolyser maker Ohmium is developing proton exchange membrane (PEM) electrolysers and is planning to hike output at its main factory in India, where it seeks to capitalise on advantages in manufacturing costs and access to a growing market for renewable hydrogen. Argus spoke to chief executive Arne Ballantine about the firm's technology, its growth strategy, and views on Indian and global hydrogen markets. Edited highlights follow:
What is your current and planned manufacturing capacity?
We used our most recent $250mn investment about a year ago to set up factory space for 2 GW/yr and brought in all the long lead tooling to support that. Now we'll fill up the factory as we need, buying the shorter lead pieces of equipment that might take only 6-8 weeks to buy. We'll probably be at 30-50MW in the last quarter of this year, tracking towards 10 times that by the end of next year. So, 500MW per quarter by the end of 2025, which is the full 2 GW/yr. And because we factory mass-produce our electrolysers, it's easy for us to add capacity — then we'll start looking at doubling capacity from there.
Why did you choose India for your factory?
India has a very robust automotive supply chain, and cars are perhaps one of the products in our world that have best captured high-volume manufacturing. We set up our supply chain to tie into this, so we're working with similar types of companies when we buy many of our materials and components, such as sheet metal enclosures [for the electrolysers]. We designed our product so the cabinets and all the components like pumps and plumbing are essentially at an automotive scale. That gives you a very good cost basis. In India now, the electronics business is starting to grow as well — not only consumer products, but all the way to the semiconductor chip level. There is a great talent pool of engineers and manufacturing folks to hire in order to build out your manufacturing base and there's also a wonderful set of suppliers.
What do your electrolysers cost today?
It depends on the order volume, but we certainly see Ohmium's total installed solution costing $1,200/kW or less, which on a total installed system basis is cost-competitive with alkaline. The equipment contains almost everything you need. You only have to add a few things at the end just to put it together. For this design, the added engineering, procurement and construction (EPC) cost is maybe as low as 10pc. Maybe in places like the US it might be 15pc, maybe 20pc. If you take the equipment cost and add maybe only 10pc or 15pc for EPC costs, you can stay below $1,200/kW. A big focus for us is to figure out how to keep the added EPC cost down.
Has the recent materials cost spike abated yet?
Everyone felt some increase in costs from inflation. There was a short blip in electronics during the Covid-19 pandemic that's largely over now and I don't see it coming back. If anything, I see the inverse as EVs [electric vehicles] are in a little downward cycle so a lot of power electronics are looking for a home, which is a good thing for electrolysers.
Can you cut costs further to compete with alkaline?
As I mentioned earlier, our total solution is cost-competitive with alkaline today on an apples-to-apples basis. We know exactly how to bring the cost down over time — I've worked on this for 24 years. It's not cost that keeps me up at night — it's how we help everyone to build out the electrolyser projects. PEM will win against any other technologies — it's the most efficient technology, and Ohmium makes the most efficient PEM. My co-founding team and I had experience with PEM, alkaline and solid oxide. We knew that alkaline would have limitations in coupling directly to renewables and the same challenge with solid oxide. You can cycle PEM up and down very hard, which is something you can't do with alkaline or solid oxide, and that is a huge added value — in fact, you need it in order to couple with renewables. Plus, PEM is very energy dense. We'll ship units this year containing 3MW, and those units will be 4MW next year, and we'll continue to increase that density.
Those are made up of 7-8 half-megawatt modules that we cluster together so you can still run the electrolyser if a single one fails and more easily fix it. Alkaline also involves extra costs to raise the purity of the hydrogen output, which is typically 99pc compared with PEM's 99.99. And purification steps usually have an 80-90pc yield and 10-20pc loss of the hydrogen product. In 2020 or 2022, developers' understanding of how to run these simulations was not as sophisticated, but in 2024, everybody knows.
What about scarce materials needed?
PEM's number-one challenge is strategic supply chain constraints, such as with precious metal and membranes, but we set out to tackle that from day one and we're now very vertically integrated. Things like catalyst layers and plate coatings we're producing ourselves, rather than using an external supply chain. At this point, there's only a tiny bit of iridium needed. Original-recipe PEM used in aerospace applications might have allowed for only 2GW based on global iridium mining, but with today's supply of iridium we could make 100GW of electrolysers if you asked us to.
Which countries and sectors are you seeing orders from first?
We've already installed two projects in the US, one in India — with another one about to install — two in Europe and one in the Middle East. We've been focused on opportunities in Europe and we see it really starting to accelerate now. There are opportunities in the US, but it has taken everyone a while to understand how the Inflation Reduction Act is going to play out, and I think that's very reasonably delayed things. We've done a fair amount of work in India because it's like a second home for us, where we have a lot of operations. And we've seen attractive things in the Middle East. We've started with those four markets, but we also see great opportunities in Australia and South America.
When will you start work under your deal with Indian state-controlled power utility NTPC and what's driving Indian demand?
We're starting to see the first NTPC projects, and I expect announcements in the second half of the year. We'll have to wait and see because India has policies to settle. Green hydrogen offers a chance to expand economies in countries that don't have native hydrocarbons. Refineries are a great example, because instead of using some hydrocarbons to make hydrogen, you can inject green hydrogen and then redeploy that 100-200MW of hydrocarbon value elsewhere in your economy. If India's goal is to put more energy into its economy and grow its total economy size, it can either import more hydrocarbons — which impacts its trade deficit — or, with relatively modest investment, set up 100-200MW of renewable hydrogen production at each refinery. India has been on that track since prime minister Modi made his Hydrogen Mission speech back in 2021.
