Nel ASA’s Pivot with Nikola and Bold Alliance with Fortescue

Nel ASA’s Pivot with Nikola and Bold Alliance with Fortescue

February 2, 2024 0 By Angie Bergenson

Nel ASA’s Strategic Realignment with Nikola and New Alliance with Fortescue

In a pivotal move within the green energy sector, Nel ASA, a renowned hydrogen company, has restructured its prior agreement with Nikola, a key player in the electric vehicle industry. At the same time, Nel ASA is stepping up as a supplier for Fortescue’s 80 MW Phoenix Hydrogen Hub project, signaling a new phase in its expansion.

This step is part of Nel’s strategic initiatives to bolster its industry standing and reaffirm its dedication to advancing sustainable energy solutions. The adjustment with Nikola and the ensuing collaboration with Fortescue not only highlight Nel’s flexibility but also its eagerness to capitalize on fresh business opportunities in the fast-paced energy field.

The Evolution of Nel ASA and Nikola’s Partnership

The bond between Nel ASA and Nikola has deep roots that trace back to 2018. The two firms initially signed a supply agreement, marking the onset of their collaborative journey in the green energy sector. This agreement was a significant landmark for both organizations, laying the groundwork for a long-term alliance aimed at championing sustainable energy solutions.

In 2020, the partnership took a significant stride when Nikola issued a definite purchase order to Nel for 85 MW of electrolyser equipment. This decision was instrumental in leading Nel to establish its alkaline electrolyzer mega-factory in Norway. The factory was set up to manufacture large quantities of electrolyzers required to fulfill Nikola’s hydrogen production needs.

Despite its share of ups and downs, this cooperative relationship has persisted. Even though Nel sold off all its shares in Nikola, their working relationship remained unaffected. The two companies have maintained their collaboration, demonstrating a mutual commitment to promoting clean, renewable energy.nikola news hydrogen companies Fortescue and Nel Asa new agreement

Revisions in Nel ASA and Nikola’s Agreement

As we venture into 2024, their relationship’s dynamics are once again shifting, with a realignment of their former agreement. The details of this revised agreement will be explored in the sections that follow.

In a recent development, Nel ASA and Nikola have mutually agreed to dissolve their original supply agreement from 2018. This decision indicates a significant shift in their longstanding partnership, signaling a realignment of their strategies in the green energy sector.

The updated agreement between Nel ASA and Nikola involves providing 110 alkaline stacks and related Balance of Stack (BOS) equipment. This new arrangement significantly differs from their previous agreement and indicates a change in Nikola’s hydrogen ambitions.

In response to the recent changes in the agreement between Nel ASA and Nikola, Nel’s CEO, Håkon Volldal, expressed his enthusiasm for the new direction.

“We are excited about the realignment of our partnership with Nikola,” said Volldal. “This new agreement allows us to adapt our strategies in line with the evolving needs of the green energy sector. We believe that by supplying 110 alkaline stacks and related Balance of Stack equipment, we can support Nikola’s renewed hydrogen ambitions efficiently.”

As part of the changed scope, Nel will receive compensation of $9 million. This compensation is designed to counterbalance the impact of the revised agreement on Nel’s operations. It’s a strategic move that ensures stability for Nel while allowing Nikola to adapt its approach to hydrogen production.

This realignment of the agreement between Nel ASA and Nikola reflects the dynamic nature of the renewable energy industry. As the sector continues to evolve, companies must adapt to changing market conditions and consumer demands. This revised agreement signifies just that – a readiness to adapt, innovate, and forge ahead.

The New Alliance: Nel ASA and Fortescue Future Industries

The renewable energy sector is in the midst of a significant shift as Fortescue Future Industries takes over the Phoenix Hydrogen Hub project, originally orchestrated by Nikola. This strategic move is centered around the creation of a hydrogen production facility based on electrolysis technology, solidifying Fortescue’s position as a formidable player in the American green energy space.

In the original agreement, Nel played a pivotal role by supplying 80 MW of electrolyser equipment to Nikola. However, with Fortescue stepping in, alterations in the scope of delivery are expected.

The newly formed partnership between Nel and Fortescue includes updated guarantees and warranties for the equipment. While the specifics of these updates have not been shared publicly, it is clear that they are designed to accommodate the evolving needs of the hydrogen project and meet Fortescue’s unique requirements.

Nel’s CEO, Håkon Volldal, expressed his enthusiasm about partnering with Fortescue Future Industries on this innovative project. He highlighted the importance of Fortescue’s acquisition of Nikola’s Phoenix Hydrogen Hub and stated that Nel’s role in supplying the electrolyser equipment and providing updated guarantees and warranties is crucial to the project’s success.

In response to these changes, Nel is set to receive compensation. While the exact sum has not been revealed, it is known that Nel will be receiving approximately USD 11 million from Fortescue. This compensation aims to counterbalance any potential disruptions caused by the revisions in the agreement, ensuring stability for Nel and enabling Fortescue to maximize the potential of the Phoenix Hydrogen Hub for its green energy ventures.

In essence, this revised agreement between Nel and Fortescue marks a significant turning point in the renewable energy industry. With the acquisition of Nikola’s Phoenix Hydrogen Hub by Fortescue and the subsequent modification of the agreement with Nel, the stage is set for an exciting new phase in sustainable energy production.

The Current Stock Market Situationhydrogen news ebook

In the stock market landscape, Nikola Corporation (NKLA) has recently seen a downward trend. As of the most recent trading day’s close, Nikola’s stock price was at $0.65, a slight decrease from its last close. The year-to-date change stands at -16.58%, indicating a challenging start to the year for the company.

However, it’s crucial to view Nikola’s stock performance within the broader market context. Many related stocks have also faced a downturn on the same day, suggesting a wider market trend rather than an isolated incident specific to Nikola.

For instance, the Dow Jones Industrial Average opened lower after a strong January Jobs Report. Similarly, the NASDAQ experienced fluctuations, dropping and then popping again after the jobs report. It’s clear that the overall market conditions are volatile, and many companies are navigating through similar challenges.

While Nikola’s current stock performance might be less than stellar, it’s worth noting that stock market trends are inherently unpredictable and often influenced by a multitude of factors. It’s also crucial to remember that the stock market often reflects short-term investor sentiment, which might not necessarily align with a company’s long-term potential or strategy.

As we conclude, let’s note that while Nikola faces challenges today, it’s part of a larger tapestry of market movements and economic indicators. The journey towards a sustainable energy future is a complex one, but with strategic partnerships and innovative projects like the Phoenix Hydrogen Hub, both Nikola and Nel ASA continue to contribute significantly to this global endeavor.



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