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Michigan to get $400 million hydrogen technology facility from Norwegian company

Riley Beggin
The Detroit News

National Harbor, Md. — A Norwegian company will build a $400 million hydrogen technology facility in Michigan, Gov. Gretchen Whitmer and Commerce Secretary Gina Raimondo said Wednesday.

The project from Nel Hydrogen, intended to produce renewable hydrogen, would be the largest of its kind in the country and is expected to create 500 jobs at a still-undecided site in southeast Michigan. Nel CEO Håkon Volldal said the company had decided to build another plant in the United States because of new federal incentives passed through the Inflation Reduction Act.

"I can tell you as a European, it does work," he told Raimondo during a press conference about the announcement at the SelectUSA Investment Summit. "Some of our largest orders are now coming from the United States, and we as a supplier want to be close to our customers," he said, adding that they had been searching for more than a year to decide which state to build in.

"The reason we have picked Michigan is, of course, the attractiveness of the financial package that has been offered, but it's more than that," he said. "It's access to a skilled workforce, it's the proximity to technical universities, business partners like General Motors that we are collaborating with," and the proximity to its research center in Connecticut and Detroit's international airport connecting to Norway.

The state has offered Nel up to $10 million in business development program grants, Michigan Economic Development Corp. CEO Quentin Messer said.

Recent economic development projects that have been granted state funding through other funds have frequently been granted property tax exemptions. But Messer told The News that will be determined by the local government that is eventually selected by the company. He expects the site will be secured within the next 90 to 180 days.

Nel has a facility in Norway that will be able to produce 1 gigawatt of electrolyzers per year and another plant in Connecticut that has a 0.5 gigawatt annual capacity. When finished, the Michigan plant will have a 4 gigawatt production capacity.

The Michigan plant alone will have more electrolyzer capacity than all of Europe combined and will be one of the largest in the world, "if not the largest," Volldal said.

It will build alkaline electrolyzer equipment, a technology needed to produce renewable hydrogen by creating hydrogen from water and energy. It has automotive applications — primarily for heavy transportation such as airplanes and long-haul trucks — as well as other industrial uses.

"We know that the shift from the internal combustion engine is happening fast and winning the future requires electrification, which is why we are competing and winning the race for battery plants and hydrogen, too," Whitmer said.

Volldal did not cite specific starting wages for jobs at the plant, but said he expects starting wages will be "above market average" and will include a mix of blue- and white-collar jobs. The factory will be "built in steps to match supply with demand," according to a press release Wednesday from the MEDC.

The Inflation Reduction Act passed along party lines last year included massive tax credits for companies to produce hydrogen from renewable sources. Nearly 95% of all hydrogen produced today is made from fossil fuels.

"The best businesses the world over want to invest in the United States to take advantage of" the IRA subsidies, Raimondo said.

Volldal also credited Whitmer and her visit to the company's headquarters in January for convincing them to choose Michigan. Whitmer's administration has been pushing to draw more companies, particularly in clean energy and automotive sectors, to the state since Ford Motor Co. and its battery partner announced they would invest $11.4 billion in EV and battery plants in Tennessee and Kentucky.

Since then, projects funded in part with state incentive packages have been announced by Ford, General Motors Co., Our Next Energy and Gotion Inc.

Whitmer also noted that the state is in the running to secure one of the Department of Energy's new "hydrogen hubs," a $7 billion program funded by the infrastructure law to create networks of hydrogen producers around the country.

If selected, it would drive hundreds of millions of dollars of investment into the state, Whitmer said. "I hope the former governor of Michigan heard me say that loud and clear," she said, referencing former Gov. Jennifer Granholm, who currently serves as U.S. Energy Secretary.


Twitter: @rbeggin