28 January 2024 – Hydrogen24 Interview with CEO Jarle Dragvik
Since the interview was conducted and published in Norwegian, we present the English translation here.
As several major green projects were canceled or postponed far into the future, 2024 turned into a challenging year for both Norwegian and international hydrogen players.
But is the situation really that dire?
That was the starting point for our conversation with Jarle Dragvik, the CEO of HydrogenPro.
“Another trend is that the focus is increasingly shifting toward Europe. Previously, the U.S. was considered the driving force within renewables. But this is now changing,” Dragvik explains. “That said, it will take some time, as much of the European hydrogen infrastructure still needs to be developed, and the end-users must be secured.”
“We should also not forget that there already exists a large hydrogen market worth over $200 billion annually. The challenge is that this is primarily based on gray hydrogen. Fortunately, there’s a clear focus on decarbonization in the so-called ‘hard-to-abate’ sectors. For example, the steel industry—with companies like Salzgitter and the development of green steel in Sweden—shows that we are moving in the right direction.”
Three Reasons Why I’m Optimistic
“The first reason is that HydrogenPro is delivering to two of the ten largest projects globally—namely, ACES and Salzgitter,” says Dragvik.
“This is significant because it provides us with a unique hands-on experience we can benefit from. Any new potential customer will always be interested in the capacity our products and solutions can deliver. The fact that we can now draw on the experience from the 42 electrolyzers (and 2 backup electrolyzers) we’ve already delivered to the ACES project, as well as the 20 we’re currently delivering to Salzgitter, gives us a strong competitive edge.”
“For the second reason, we are on track to start full-scale testing of our next-generation electrolyzer at Herøya,” Dragvik continues. “The commissioning of this, which combines today’s electrolyzer technology with our much more efficient third-generation electrodes, will begin as early as February. We are looking forward to verifying this at full scale.”
“It’s true that we’ve had a rough period in certain areas, and that period is probably not completely over. At the same time, there are trends worth noting,” says Dragvik.
“After several large projects were delayed, we now see a clear shift toward smaller, more feasible projects. Instead of aiming too high, companies are starting with around 20 MW projects, scaling them up to between 50 and 100 MW as the market develops.”
“The third reason is that some of the large projects that have been postponed are now becoming sufficiently mature. We, therefore, believe that more investment decisions are coming, but again, the timing is not up to us. Remember that electrolyzer systems for hydrogen production in these giga-projects rarely account for more than a third of the total cost. As such, our industrial partners drive the timeline here. However, we believe this is getting closer,” says Dragvik.
Will Protectionism and Trade Barriers Affect You?
“It’s true that the Hydrogen Bank, among others, requires that a certain percentage of production takes place in Europe. However, this is not a problem for us,” explains Dragvik.
“Even though we source components from our suppliers in China, we still perform a lot of the processing for our European end customers in Europe, for instance, in Aarhus or Erfurt, Germany. We, therefore, have a supply setup that qualifies 100%, ensuring our customers can receive support from the Hydrogen Bank,” he adds.
What About the Trend of Increasing Tariffs?
“Both we at HydrogenPro and other players will adapt, but I’m afraid the current trend of international protectionism and trade barriers is a step in the wrong direction. The reality is that carrying out the green transition costs enormous sums, but the alternative cost of higher emissions is necessarily even higher. The main focus should, therefore, be on reducing costs by developing increasingly competitive products.”
“Instead of supporting European industry to make it more efficient, tariffs have been implemented. In practice, this only makes European projects more expensive, which works against the green transition and slows it down,” Dragvik says.
A Scalable Organization
You recently laid off five employees. What about future developments?
“It was unfortunate that we had to temporarily lay off employees in Norway. At the same time, our global organization is structured to scale in line with workload demands. This is how it has to be. We also need to ensure this is done as gently as possible for those affected,” he says.
“Currently, we have about 150 employees at HydrogenPro, but we will soon grow. For example, we are upgrading the production line in Denmark to fulfill deliveries to Andritz. This means the number of employees will increase in the near future,” concludes Dragvik.
If you would like to read the full article in Norwegian, click here to go to Hydrogen24.
– Det er tre grunner til at jeg er optimist – Hydrogen24