INTERVIEW | 'Our solid oxide electrolysers can produce cheaper green hydrogen than Chinese alkaline machines': Topsoe

This article was first published in Hydrogen Insight, and is reprinted with their kind permission. Find the article here.

Higher efficiency of Danish company’s SOE equipment can reduce amount of renewables capacity needed by around 30%, chief commercial officer Sundus Cordelia Ramli tells Hydrogen Insight
 
Last month, Hydrogen Insight revealed that developer Hive Energy had narrowed down its choice of electrolyser for its 1.2GW green hydrogen and ammonia project in South Africa to two suppliers: China’s Longi and Denmark’s Topsoe.

This raised eyebrows as Chinese alkaline electrolysers such as Longi’s are far cheaper than those made in Europe, and Topsoe’s new solid-oxide electrolysers (SOEs) are more expensive than alkaline equivalents.

In an interview with Hydrogen Insight, Sundus Cordelia Ramli, chief commercial officer at Topsoe’s power-to-X unit, confirms that this was true, adding: “And we’re winning from an LCOH [levelised cost of hydrogen] perspective. Isn’t that insane?”
 
The reason why Topsoe’s higher-cost SOEs can offer cheaper green hydrogen than alkaline electrolysers is that they are far more efficient — ie, they need less electricity to produce the same amount of H2.

According to Ramli, the solid-oxide electrolysers are 15-20% more efficient than alkaline machines, and up to 30% more efficient when using waste heat (which is always available for projects that produce ammonia).

In simple terms, this means that 800MW of Topsoe’s SOEs would be able to produce roughly the same amount of green hydrogen as a 1GW alkaline project from the same amount of renewable energy, falling to 700MW with the addition of waste heat.

This is because SOEs need high-temperature steam instead of liquid water, and without waste heat, some electricity would be required to generate the steam.
 
“We can be as competitive as alkaline and PEM [without waste heat] — on an LCOH perspective, not on a capex perspective.”

This is true even when taking into account the fact that the ceramic stacks used by SOEs have to be replaced every few years due to the increased degradation brought on by the high temperatures — far more often than in alkaline electrolyser stacks.
 
And it’s also true when taking into account the fact that Topsoe insures its electrolysers against technical problems, which according to Ramli does not increase their cost.

“I think the misconception [from developers] is ‘will our project be more expensive if we have to pay for insurance?’ It doesn’t because that the risk premium will go down, the cost of capital will go down. And when you get the interest rates from the banks, it will also go down, because the banks know they’ll get their money back no matter what.”

On top of all this, Ramli says that Topsoe is working hard to bring down the costs of its SOEs, which do not require any expensive materials — unlike the platinum group metals needed by PEM electrolysers.
 
This includes sourcing lower-cost materials, economies of scale and improved design, such as increasing current density.

Topsoe has about 200 scientists working in its research & development (R&D) department just on SOEs, Ramli says, adding that 8-10% of the company’s revenues are reinvested in R&D every year (across a wide portfolio of products, including ammonia production equipment).

“So this is important because innovation is the only thing that’s going to solve everything, right?”
 
Ramli also believes that Topsoe’s SOE ceramic stack — which contains catalysts in the surface chemistry — is far more advanced than those being produced by rival manufacturers.

“I think we are just way ahead… we have, I would say, a good three to five years’ lead on the other ones out there,” she says.
 
“And then on the top of that, we are a company who’s already been doing catalysts for 80 years. So this is our bread and butter.”
 
Ramli says that there has been a lot more industry interest in Topsoe’s electrolysers since it completed construction of its 500MW factory in Herning, Denmark, last year, while the technology has gained credibility from its demonstration project, which has been running for more than 5,000 hours.

Topsoe’s insurance company, New Energy Risk, also carried out due diligence on the technology for 15 months.
 
“They are completely comfortable that there is going to be no issue. So that’s a great stamp of approval from the financing community.”
 
And while the green hydrogen industry has been struggling to take off, Ramli is confident that Topsoe’s solid-oxide electrolyser will succeed in the market, pointing to the company’s 800MW near-term pipeline.
 
Ramli says that she was working in the offshore wind sector during its early days, when eight to nine turbine models were available, but within two years, only two were still on the market. A similar consolidation will happen in the electrolyser market.
 
“With all that kind of hype and excitement [about hydrogen a few years ago], all that money that was announced that was available, I think this is a great correction to the industry,” she says. “Because now you see the good cooks in the kitchen, right? The good projects going through, because what we need is to ensure that there is credibility in the business.”